A group of economically-aligned nations are purchasing massive amounts of gold as they prepare to end their reliance on the U.S. dollar.
According to a new report from U.S. Global Investors, the nations known collectively as BRICS are piling into the precious metal and will continue to be “huge buyers” of gold for the foreseeable future.
The firm’s CEO and chief investment officer, Frank Holmes, says the mass accumulation of gold led by China aligns with the theory that the world is on a long-term path to economic bifurcation.
“If you look back at the list of net buyers [of gold], you’ll notice that three are members of the BRICS (Brazil, Russia, India, China and South Africa) countries. I point this out because, as I’ve been sharing with you for a couple of weeks now, we may be seeing the emergence of a multipolar world, with a U.S.-centric world on one side and a China-centric world on the other.
For the first time ever, BRICS countries’ share of the global economy has surpassed that of the G7 nations (Canada, France, Germany, Italy, Japan, the U.K. and U.S.), on a purchasing parity basis.”
According to a report from World Gold Council, China has added 102 tons of gold to its stockpiles since the start of the year.
And gold is the key to this potential multipolar economic future, says Holmes, as it will likely be used to back the creation of a new currency that does not utilize USD.
“The BRICS need the precious metal to support their currencies and shift away from the U.S. dollar, which has served as the global foreign reserve currency for about a century.
More and more global trade is now being conducted in the Chinese yuan, and there are reports that the BRICS—which could eventually include other important emerging economies such as Saudi Arabia, Iran and more—are developing their own medium for payments.”
BRICS nations are reportedly in the early stages of designing a new currency that aims to end global dependence on the dollar.
It remains to be seen just how effective their efforts will be, with early critics like billionaire Chamath Palihapitiya stating the China will never effectively de-dollarize as long as the yuan remains pegged to the dollar.Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
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