On October 22, the 16th BRICS summit begins in Kazan, and this event is of great importance. According to financial expert James Rickards, the meeting will announce the expansion of the bloc, which could have serious consequences for the United States, according to The Daily Reckoning. The translation is published by Pravda.Ru.
“At the BRICS summit, new members will be announced. This is important, since the expansion of membership is a key condition for the launch of a viable payment system,” says the American expert.
James Rickards noted that Russia and its BRICS partners are seeking to replace the dollar by creating a new currency. However, it should be noted that this is not the first attempt to create an alternative to the dollar, and all previous attempts failed. The problem is that all the so-called alternatives to the dollar were not demanded by other countries. No one wanted to use a currency that could not be spent. However, Russia and its partners seem to have found a solution to this problem.
The BRICS summit is likely to announce the addition of new members to the bloc. Currently, nine countries are members of the organization, with another twenty or more pending applications for membership. So there are about twenty nations that are potentially willing to use the new currency and make payments with each other.
“The most important aspect is that there are enough participants in the BRICS currency union so that the recipient of payments can use them for purchases in many jurisdictions. This limitation disappears in a currency union with 15 or 20 or more participants. If Russia launches a BRIC (the supposed name of the new BRICS currency), it could then use them to buy Embraer airplanes from Brazil or semiconductors from Malaysia,” Rickards said.
Non-BRICS countries could join the scheme. They will be sure that they will always be able to pay BRIC to their trading partners, which are likely to include BRICS members.
Thus, the new currency will be widely circulated around the world. At the same time, the influence of the US dollar will decline. As a result, the dollar will lose its importance, but this will not happen immediately.
It is worth noting that the U.S. is quite aware of the fact that the position of the dollar is not immutable. For example, U.S. presidential candidate Donald Trump has already repeatedly stated that he will impose 100 percent duties on goods from those countries that will refuse to use the dollar in their trade with other countries.