A new member of the BRICS economic alliance, according to former US congressman Ron Paul, poses a significant threat to the dominance of the US currency.
Paul claims that BRICS was founded in order to counteract American political and economic hegemony in a recent blog post.
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Saudi Arabia, one of the BRICS’s most recent members, is expressly mentioned by the former US official as a nation that might contribute to the dollar’s collapse in power.
“The ‘petrodollar’ serves as the foundation for the dollar’s status as a reserve currency. Saudi Arabia and Brazil agreed to a pact at the beginning of the year under which Brazil’s real would be accepted as payment for oil instead of dollars.
If Saudi Arabia signs similar deals with other BRICS nations, it will hasten the end of the dollar’s reign as the reserve currency.”
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Petrodollars are the earnings from crude oil exports that are received in US dollars. Saudi Arabia decided to accept dollars as payment for oil in the 1970s in return for US military security.
Saudi Arabia produces more than 10.8 million barrels per day, making it the second-largest oil producer in the world.
The BRICS economic bloc reportedly gained six new members late last month, including Saudi Arabia, Iran, Ethiopia, Egypt, Argentina, and the United Arab Emirates, with additional nations reportedly interested in joining.
Paul claims that the possible long-term effects of the United States’ rapidly increasing debt burden are one of the reasons more countries are seeking to replace or develop alternatives to the dollar.
Paul continues by claiming that the weaponization of the dollar is changing how other nations view the US dollar.
The West imposed sanctions on Russia in March 2022 that resulted in the freezing of nearly $300 billion in reserves. Additionally, the sanctions prevented Russian banks from using SWIFT, a global payment network dominated by the dollar and the euro.
Paul continues,
“The rejection of the dollar is also being driven in large part by resentment over the ‘weaponization’ of the dollar’s reserve currency status… It was inevitable that the arrogance of our foreign policy elite would eventually cause a backlash.”
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