1320 DOLLAR COLLAPSE: "The US Has Made a MAJOR BLUNDER..." - Jim Rickards
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1320 DOLLAR COLLAPSE: "The US Has Made a MAJOR BLUNDER..." - Jim Rickards
14 Mar 2026 The US has made a major blunder by weaponising the dollar and imposing sanctions on Russia, which are likely to fail and backfire. Russia’s economy is projected to grow, and the country has diversified its reserves, including a significant amount of gold, making it less vulnerable to US sanctions. The potential seizure of Russian assets held in US Treasury securities would further damage global confidence in the dollar.
The BRICS currency, pegged to a weight of gold, will facilitate international trade and reduce reliance on the US dollar. While it won’t immediately replace the dollar as a reserve currency, its widespread acceptance among BRICS nations will enable global transactions. The new currency won’t be based on the yuan or ruble, and won’t require physical gold backing. More gold is backing the currency.
Key points
* US Foreign Policy Blunder: The US has made a major blunder by weaponizing the dollar and overusing economic sanctions, which are unlikely to succeed against Russia. * Ineffectiveness of Sanctions on Russia: US economic sanctions against Russia are likely to fail because Russia is a large economy with alternative payment channels and significant hard currency reserves. * Russian Economic Outlook: The Russian economy is projected to grow at a faster rate than the US economy, with a strong labour market and advancements in technology. * Sanctions’ Ineffectiveness: Sanctions against Russia have been ineffective due to lack of global support and the ability to circumvent them. * Dollar Weaponization Backlash: The US’s use of the dollar as a weapon, particularly the seizure of Russian central bank assets, has led to countries seeking alternatives. * De-dollarization Trend: Countries like Brazil, China, India, and others are moving away from the US dollar in response to its weaponization. * Russia’s US Treasury Investment: Russia invested $230 billion in US Treasury securities. * Russia’s Gold Reserves: Russia increased its gold reserves from 600 to 3,000 metric tons over 11 years, representing 25% of its total reserves. * Potential Seizure of Russian Assets: There is a movement in the US to seize frozen Russian assets, potentially causing damage to global confidence in the dollar. * Default Consequences: Defaulting on US Treasury securities, even selectively, would deter other countries from investing in US dollars. * Dollar Dependence: Countries like Saudi Arabia, UAE, and China might reconsider relying on the US dollar if they fear similar actions against them. * Alternative Assets: Countries seeking to preserve their assets might move towards other asset classes, such as gold, to avoid potential US intervention. * Limitation of Bilateral Currency Arrangements: Even with bilateral currency agreements, the practicality of using the currency for transactions is limited if the seller has limited needs for goods or services from the buyer country. * Key to a Successful Currency: A large membership base is crucial for a new currency to be successful as a reserve and transaction currency, similar to the Eurozone’s success with 19 member countries. * Focus of BRICS Expansion: The main focus of the BRICS summit in Johannesburg was the expansion of membership, which holds greater significance than the introduction of a new currency. * Currency Backing: The new BRICS currency will be backed by a weight of gold, not a fixed exchange rate to the dollar. * Currency Functionality: The BRICS currency will primarily serve as a transaction currency for exports, imports, and trade settlements within the BRICS nations. * Reserve Currency Status: While the BRICS currency may eventually achieve reserve currency status, this is a longer-term goal and not the primary function of the currency. * Currency Acceptance and Reserve Potential: The yuan and ruble lack wide acceptance and reserve potential, hindering their ability to become a new global reserve currency. * Rule of Law Concerns: Doubts exist regarding the rule of law in China and Russia, raising questions about their reliability in a new currency system. * Gold Standard Infeasibility: The BRICS countries don’t possess sufficient gold reserves to back a currency, making a new gold standard impractical.