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BRICS is a grouping of the world economies of Brazil, Russia, India, China, and South Africa formed by the 2010 addition of South Africa to the predecessor BRIC. The original acronym “BRIC”, or “the BRICs”, was coined in 2001 by Goldman Sachs economist Jim O’Neill to describe fast-growing economies that would collectively dominate the global economy by 2050. The BRICS have a combined estimated total population of about 3.2 billion, or around 42% of the global population.
The United States government has been pressuring Saudi Arabia to continue pricing its oil sales in US dollars. Saudi Arabia originally agreed to do so in 1974, shortly after Nixon took the dollar off the gold standard, in exchange for the military protection of the United States. The United Arab Emirates and the United States have had friendly relations since 1971 and have established formal diplomatic relations since 1972. The two countries have developed strong government-to-government ties, including close security cooperation. The UAE plays an influential role in the Middle East and is a key partner for the US. Bilateral trade has risen to $23 billion, and the UAE has participated in U.S.
The economic alliance that represented just 17% of GDP in 1995, now represents 32% of global GDP, surpassing G7 nations for the first time. This data was from April, but more recent numbers peg the BRICS share of global GDP at 33.5%. The BRICS alliance is now a force to be reckoned with and their growth is only getting started.
Put simply, there has never been a threat to the dollar’s supremacy as significant as this. Dominant reserve currencies have a life expectancy of around 100 years. The U.S dollar took the title officially in 1944 as part of the Bretton Woods Agreement, but many argue that this date should go as far back as the 1920s as the dollar was already the dominant global currency then. Thus, the U.S dollar is nearing its 100-year shelf life.
The key driver of the fall of the Roman empire was excessive money printing and inflation. Well, not technically “money printing,” but Roman leaders continually lowered the amount of silver in the Denarius coin that gave it value. This was done so that more coins could be pumped into circulation and the government could spend more growing their military and expanding their empire. This was their version of printing money and it is eerily similar to what is happening in the United States today.
Some also speculate that Bitcoin could become an alternative to the dollar and new world reserve currency given its scarcity, ease of storage and transport, decentralization and growing acceptance globally. Bitcoin operates on a peer-to-peer network and is not controlled by any government or institution. Unlike fiat currencies, which can be printed at will, there will only ever be 21 million bitcoins in existence.
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