BRICS 'steps on the gas' to rebuild the global financial system, accelerates de-dollarization, SWIFT shakes, gold price rises to 150,000 USD/ounce

All eyes are on the BRICS 2024 Summit taking place from October 22-24 in Kazan, Russia - where the host country's President will host 36 world leaders, from many countries and international organizations, including China, India and Iran, and one of the goals is to reduce the number of transactions in USD in trade transactions.

BRICS 'steps on the gas' to rebuild the global financial system, accelerates de-dollarization, SWIFT shakes, gold price rises to 150,000 USD/ounce. (Source: tvbrics)

A global financial reset is coming and under a new system, gold could be revalued to as much as $150,000 an ounce, said Andy Schectman, chairman and owner of Miles Franklin Precious Metals, adding that this year's BRICS summit could be a potential trigger.

An inevitable result of the growing trend of de-dollarization is a new global financial system, in which an asset considered a “safe store of value” such as gold will be revalued. At the same time, the expansion of BRICS membership is promoting a new global financial system, oriented towards alternatives to SWIFT and de-dollarization.

BRICS member states are expected to continue discussions on the goal of creating a currency that could be backed by gold as an alternative to the US dollar, aimed at strengthening economic sovereignty and reducing dependence on the US currency.

A few weeks ago, President Putin publicly discussed the possibility of a BRICS currency that could compete globally with the US dollar. Some reports have suggested that the currency would be backed in part by gold and the currencies of BRICS member states.

Recent data shows that BRICS countries now hold 20% of global gold reserves, fueling speculation that BRICS countries may be looking to create a currency that could rival the US dollar and be backed by gold.

With the latest expansion, BRICS accounts for about 30% of the world's land area, 45% of the world's population and 20% of global trade. Observers note that, with its strengths, the group has entered a new era of broader BRICS cooperation.

"It is important that we have a payments mechanism that allows for easy transactions between BRICS countries. This will further support the bloc's autonomy in international trade," notes Lance Witten, editor-in-chief of South Africa's IOL . The idea of ​​a BRICS currency has long been discussed, potentially a basket of currencies backed by natural resources such as gold, oil and gas. In addition, the BRICS countries actually hold more gold and currency reserves than the IMF and the European Central Bank combined.

“For this currency to function properly, we need an alternative financial messaging system, like SWIFT, and digital currencies for cross-border transactions,” Russia’s Sputnik Agency pointed out.

Also at the heart of the discussions this time was the broader issue of BRICS expansion, especially with the inclusion of new members such as Iran, Saudi Arabia, the UAE, Ethiopia and Egypt. This expansion of BRICS has also significantly increased BRICS influence, especially in the energy and natural resources sectors.

A potential BRICS currency would allow these countries to assert their economic independence while competing with the current international financial system. The current system is dominated by the US dollar, which accounts for about 90 percent of all currency transactions. Until recently, nearly 100 percent of oil and gas trade was conducted in US dollars; however, by 2023, one-fifth of oil and gas trade was reported to be conducted in currencies other than the US dollar.

Indeed, the weaponization of the dollar and the SWIFT system has also raised deep concerns about the security of the US-centric global financial order. As sanctions increasingly target countries like Russia and Iran, exclusion from SWIFT has serious economic implications, not only for the targeted countries, but also for global trade in general.

For example, Ethiopia has a friendly visa regime with Russia, but to apply for a visa you need to pay with a bank card. With Russia cut off from SWIFT, simple tasks like paying for a visa have become difficult. This situation highlights the urgent need for alternatives to SWIFT and a financial system less dependent on the US dollar to mitigate such risks.

Meanwhile, a prominent development in the world market today is the US trade war with China, as well as a series of Western sanctions against China, Russia, etc. If the BRICS countries establish a new reserve currency, this will likely have a significant impact on the USD, possibly leading to a decline in demand, or what is often called de-dollarization. But in return, this trend will not only have an impact on the US, but also on economies around the world.

Of course, it may be too early to predict when a BRICS currency will be issued, but this is a good time to consider the potential of a common BRICS currency and its possible implications for investors.

Source: https://baoquocte.vn/brics-nhan-ga-tai-thiet-he-thong-tai-chinh-toan-cau-day-nhanh-phi-usd-hoa-swift-lung-lay-gia-vang-len-150000-usdounce-291042.html