BRICS Tariff Could Destroy The Dollar (Hedge With Gold & Silver)

Summary

The video discusses the potential impact of President-elect Donald Trump's tariff threat against the BRICS nations, aiming to defend the US dollar's position as the global reserve currency. It explores the ongoing efforts by BRICS countries to undermine the dollar and how this conflict could affect global trade and the US economy. Trump’s warning of 100% tariffs against countries moving away from the dollar is analyzed, as well as the broader trends in dollarization and the rising importance of gold and silver as hedges. The video emphasizes the potential consequences of these economic shifts, including inflation and further dollarization, and highlights the significance of hard assets like gold and silver for protection.

Takeaways

• 😀 The US dollar's status as the world reserve currency is crucial for the global financial system, allowing the US to run deficits and trade globally with ease.
• 😀 The BRICS nations (Brazil, Russia, India, China, and South Africa) have been steadily working to undermine the US dollar's dominance, with efforts accelerating in recent years.
• 😀 President-elect Donald Trump has issued a warning to BRICS nations, threatening 100% tariffs if they attempt to create a new currency or move away from the US dollar in international trade.
• 😀 Kremlin spokesman Dmitry Peskov responded, arguing that economic force by the US would push more countries toward using national currencies and undermine the dollar's appeal.
• 😀 Despite the tensions, market reactions have been mixed, with the US dollar index rising due to political and economic factors unrelated to the BRICS threat.
• 😀 Gold and silver remain crucial hedges against potential currency crises, as both metals have maintained value despite dollar fluctuations.
• 😀 The idea of a BRICS-backed currency is still not on the table, with Russian officials indicating it's too early to replace the US dollar, focusing instead on acquiring gold and silver.
• 😀 There are increasing reports of Russia and China boosting their gold and silver reserves as part of their efforts to distance from the dollar and as an alternative currency.
• 😀 The US government’s threat to impose tariffs could lead to significant inflation, as it would raise the cost of goods imported from BRICS nations, including essential items like manufactured goods and raw materials.
• 😀 If BRICS nations push back and continue their efforts for dollarization, gold and silver will likely see an increase in demand as people look for assets that are not tied to the US financial system.

Q & A

What is the current status of the US dollar as the world's reserve currency?

The US dollar has been the world's dominant reserve currency for decades, allowing the US to run large debts and deficits. It is crucial for international trade, especially in oil, and is held in reserves by many countries. However, there is growing concern that the BRICS nations are actively working to reduce dependence on the dollar.

What recent threat did President-elect Donald Trump issue to the BRICS nations regarding the US dollar?

Trump threatened to impose 100% tariffs on BRICS nations if they attempt to undermine the US dollar's status as the world's reserve currency. He emphasized that these nations should not create an alternative currency or support one to replace the US dollar.

How did the BRICS nations respond to Trump's tariff threat?

The BRICS nations, through Kremlin spokesperson Dmitry Peskov, responded by stating that the US's use of economic force would only accelerate the trend of using national currencies for trade. They argued that the US's actions, such as the freezing of Russian dollar-denominated assets, have already spurred this shift.

What impact could a 100% tariff have on the US economy?

A 100% tariff on BRICS nations would likely lead to much higher consumer prices for goods imported from these countries, such as cheap manufactured goods from China and raw materials from Brazil. This would result in significant inflation in the US.

How does the US dollar index react to political events and economic threats?

Following Trump's post, the US dollar index saw a sharp rally, indicating that investors were not overly concerned about the potential fallout from such a threat. Other factors, such as political turmoil in France and a weakening Euro, also contributed to the dollar's strength in the short term.

Why are gold and silver considered important assets in this economic situation?

Gold and silver are considered hedges against economic volatility and currency devaluation. In a scenario where the US dollar’s status is challenged, these precious metals offer tangible value that is not subject to the same risks as paper currencies, making them critical for safeguarding wealth.

What is the BRICS nations' strategy to move away from the dollar?

The BRICS nations have been actively working on diversifying their trade away from the US dollar. This includes increasing the use of their national currencies in bilateral trade, with Russia and China also increasing their gold and silver acquisitions as alternatives to the dollar.

What role do Russia and China play in the accumulation of gold and silver?

Russia and China are major producers of both gold and silver. These countries are increasingly stockpiling these metals as part of their strategy to hedge against potential risks posed by reliance on the US dollar, further strengthening their push for dollar alternatives.

What are 'goldbacks' and how do they relate to the dollarization issue?

Goldbacks are a type of currency that is backed by gold, already in circulation in the US. Some states, like Florida, are introducing their own goldbacks, which serve as an alternative to traditional fiat currency. They provide a way for people to use a tangible asset in everyday transactions.

What are the potential global consequences of accelerating dollarization by the BRICS nations?

If BRICS nations continue to move away from the US dollar, it could weaken the dollar's global dominance, leading to shifts in international trade practices and financial systems. This could cause major disruptions, including inflation in the US and reduced geopolitical leverage for the US.