Investment Analyst Warns Successful BRICS Currency Could Hurt US Living Standards – Bitcoin News

Investment analyst Jon Wolfenbarger has warned that a successful BRICS currency could harm US living standards and “lead to less power for the US government, similar to Britain’s post-World War II weakening.” He emphasized: “Due to the war between Russia and Ukraine and China’s continued economic growth, BRICS is accelerating its plans to take power from the United States.”

Impact of BRICS currency on US dollar and US standard of living

Investment analyst Jon Wolfenbarger, CFA, published a blog post titled “Will a new BRICS currency change things? Maybe” on the Mises Institute’s website last week. Wolfenbarger is the CEO and founder of Bull And Bear Profits, an investment website. He has more than 30 years of experience in the investment industry, having worked for over 22 years as a securities analyst at Allianz Global Investors and as an investment banker at Merrill Lynch and JPMorgan.

Commenting on the de-dollarization efforts of the BRICS (Brazil, Russia, India, China and South Africa) nations, he said:

Due to the war between Russia and Ukraine and China’s continued economic growth, BRICS is accelerating its plans to wrest power from the US

He mentioned several BRICS initiatives, including the New Development Bank for infrastructure lending, a Contingent Reserve Arrangement to protect against currency pressures, and a payment system as an alternative to the Society for Worldwide Interbank Financial Telecommunication (SWIFT).

Moreover, Wolfenbarger described that the BRICS nations are also working on a reserve asset based on a basket of member countries’ currencies to compete with the International Monetary Fund’s (IMF) Special Drawing Rights (SDR).

Commenting on whether the US dollar will be dethroned, the investment analyst said: “It is unlikely that the BRICS countries will seriously challenge the king dollar if their only tool is just another fiat currency they can create out of thin air.” He emphasized:

BRICS will have a much better chance if they create a hard currency backed by gold or other commodities such as oil.

“The US has the largest and safest government bond market, no capital controls and a reputation for enforcing the rule of law. In contrast, the BRICS countries are hardly known for respecting laws or having strong currencies, Wolfenbarger said. “Of course, their competition with the dollar will eventually end in failure, as Bretton Woods did, if the BRICS countries continue to create money out of thin air to finance their warfare and welfare spending.”

Regarding the economic and political impact of a BRICS currency on the US and USD, the former JPMorgan investment banker noted:

If BRICS is successful and the US does not change its policy to focus on a stronger dollar, less spending and peace instead of war, it is possible that the dollar will slowly lose its “reserve currency” status.

“This would hurt US living standards and lead to less power for the US government, similar to the weakening of Britain after World War II. All empires in history have failed, and the US is unlikely to be an exception – if BRICS can create a successful hard currency to compete with the dollar, he said.

Many agree that a successful BRICS currency could erode the US dollar’s dominance, including a former White House economist. The BRICS economic bloc is gaining more influence globally; 19 countries have applied to join or have expressed an interest in joining. A Swedish university professor said last week that Saudi Arabia joining the BRICS group will accelerate the use of the Chinese yuan as a trade currency.

Do you agree with investment analyst Jon Wolfenbarger about the potential impact of a successful BRICS currency? Let us know in the comments section below.

Kevin Helms

A student of Austrian economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open source systems, network effects and the intersection of economics and cryptography.