{"id":2014061,"date":"2023-08-28T09:54:02","date_gmt":"2023-08-28T13:54:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/are-the-brics-a-threat-to-the-us\/"},"modified":"2023-08-28T10:00:07","modified_gmt":"2023-08-28T14:00:07","slug":"are-the-brics-a-threat-to-the-us","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/are-the-brics-a-threat-to-the-us\/","title":{"rendered":"Do the BRICS pose a threat to the US?"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fare-the-brics-a-threat-to-the-us%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2014061&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>Commentary<\/h2>\n<p>The summit of the so-called BRICS\u2014Brazil, Russia, India,\u200c China, and South Africa\u2014has closed with \u2064an invitation to join the\u200c group extended to the Argentina, Egypt, Ethiopia, Iran, Saudi Arabia,\u200b and \u200bthe United\u200c Arab Emirates.<\/p>\n<p>The summit has generated a lot of headlines about the impact of \u200dthis widespread group of nations, including \u2064speculation about the end of the \u2062U.S. dollar as a global\u2063 reserve currency if \u2064this group\u2063 is perceived as a threat to the United States or even the International Monetary Fund.<\/p>\n<p>Several things, however, need to be \u200bclarified.<\/p>\n<blockquote>\n<h3>Related Stories<\/h3>\n<ul>\n<li><a href=\"http:\/\/www.theepochtimes.com\/world\/tensions-between-china-and-india-as-new-delhi-becomes-spoiler-of-the-brics-party-5480084\">Tensions Between China and India as New\u200c Delhi Becomes Spoiler of the BRICS Party<\/a> &#8211; 8\/24\/2023<\/li>\n<li><a href=\"http:\/\/www.theepochtimes.com\/article\/brazils-lula-confirms-brics-dumping-us-dollar-as-bloc-expands-5480132\">BRICS Dropping US Dollar, Working on New Reserve Currency: Brazil&#8217;s Lula<\/a> &#8211; 8\/24\/2023<\/li>\n<\/ul>\n<\/blockquote>\n<p>Many \u200bpolitical analysts believe that China lends, invests, or supports in return for nothing. China is a major economic \u200bpower, but it has\u2064 shown no interest in\u2064 making the yuan a global reserve\u200c currency. Its currency \u200bis closely \u200cmanaged and currently\u200b used\u200b in 5 percent of global\u200b transactions, according to the Bank of International Settlements.<\/p>\n<p>China and Russia \u200chave capital controls. It is impossible to have a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/patrick-mchenry-anti-china-bill-does-nothing-to-combat-china-democrats-desperate-for-a-win\/\" title=\"Patrick McHenry: Anti-China Bill Does Nothing to Combat China, Democrats 'Desperate for a Win'\">global reserve currency<\/a> without\u200d freedom of capital movement. More requirements are needed than solid gold reserves to have a stable fiat currency. It is essential to guarantee economic freedom, investment,\u2063 legal\u200d security, and the \u2063free movement of capital, as well as an open, transparent, and diversified financial\u200b system.<\/p>\n<p>China and Russia\u200d are also much more demanding and rigorous \u200clenders than many politicians think. If we\u200c were to look\u200b at the \u2062headlines, it seems that some emerging market politicians think that joining China and Russia will be a kind of free money panacea.<\/p>\n<p>Another problem \u200bwith creating a\u200b BRICS currency\u2063 is that, logically, neither China nor Russia has the slightest intention\u2064 of losing their national currency to dilute it alongside a group of \u200dissuers who have a doubtful track record in controlling their monetary imbalances. Over the past 10 years, the currencies of the BRICS guest \u200bcountries have\u200c depreciated significantly against the U.S. dollar. The Argentine peso has fallen by 98 \u200dpercent, the Egyptian\u2062 pound by \u200d78 percent, the Indian rupee by 35 percent, the Ethiopian birr by 68 percent, \u200bthe\u200d Brazilian real by 55 percent, according to Bloomberg,\u2063 and the Iranian rial has collapsed by 90 percent, according to The Economist. Putting together weak currencies does not create a\u200d strong\u200d currency. However, increasing the global use of the\u200b yuan or the ruble is much more likely.<\/p>\n<p>We must not forget that the performance of the Russian ruble (negative 68\u200c percent against the U.S. dollar, according to Bloomberg) in the last decade has \u200calso been poor despite having a\u200d relatively prudent central bank.<\/p>\n<p>The\u200c best &#8220;BRICS and guests&#8221; currency against the \u200cU.S. dollar in\u200c the last 10 years is the Chinese \u2062yuan, with a depreciation of only 14 percent.<\/p>\n<p>For a fiat currency to be \u200cstable, it is necessary that the issuer defends it as a \u2062reserve of\u2062 value, a generally accepted payment method, and a unit of measure. Freedom of capital and independent institutions that provide legal security to domestic and international\u2063 investors \u200bare essential.<\/p>\n<p>Moreover, China seems\u200b to have no interest in taking on all the challenges required to be a \u2064global reserve\u200b currency, starting with a financial and monetary\u200d system with \u2062a high level of independence from political power. It can extend the \u200duse of the yuan through its financial system and lending\u200c to partner nations.<\/p>\n<p>Many analysts ignore that what has made the U.S. Federal Reserve a \u2063success\u2062 as the world-leading central bank is \u200bthat it\u2063 is not under total state control or public management. The Fed may not be completely\u2063 independent, but it is as independent as a central bank\u200c for \u200ba fiat currency can be.<\/p>\n<p>Joining countries with\u2063 governments that <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/are-the-brics-a-threat-to-the-us\/\" title=\"Do the BRICS pose a threat to the US?\">advocate monetizing uncontrolled public spending<\/a> and massively increasing\u200c monetary imbalances cannot create a stable currency unless they implement the example of the euro, which seems unlikely. In the \u200ceuro, Germany, the country with the most prudent and responsible fiscal \u2062policy, dictated the main lines \u2064of the monetary and fiscal \u200crules to the rest. Unfortunately, \u200dthe eurozone and the \u2062European Central Bank \u2064(ECB), by imitating the United\u2063 States and the Federal Reserve, have lost most of their options to be a real alternative to the U.S. dollar. \u2063Still, the euro is the greatest fiat \u2064monetary success in the post-Bretton Woods era, so let us not \u2063deprive it of its merit.<\/p>\n<p>The BRICS alternative currency would start\u2064 with significant problems. China and Russia would have major difficulties imposing fiscal and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/feds-powell-predicts-further-restriction-including-rate-hikes-at-consecutive-meetings\/\" title=\"Powell foresees more 'restriction' ahead, with consecutive rate hikes.\">monetary policy restrictions<\/a> on their partners. Let us not forget \u2063that several of \u200dthese partners have joined\u2063 the group \u2064thinking that from now on they will be able to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/israel-cuts-dollar-holdings-adds-chinas-renminbi-for-first-time\/\" title=\"Israel Cuts Dollar Holdings, Adds China\u2019s Renminbi for First Time\">continue printing money<\/a> and spending without\u2064 control, while their monetary imbalances will be\u200b distributed to other nations.<\/p>\n<p>The euro has been <\/p>\n","protected":false},"excerpt":{"rendered":"<p>The BRICS summit concluded by inviting Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates to join. This move has sparked discussions on the potential consequences of this expanded group, leading to speculation about its future.<\/p>\n","protected":false},"author":2354,"featured_media":2014062,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2014061","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2014061","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/2354"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2014061"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2014061\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2014062"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2014061"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2014061"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2014061"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}