By James Sweet | USA
BRICS, an association between Brazil, Russia, India, China, and South Africa, is considering starting a gold trade between members of the association, which can threaten American dominance in the world economy. If BRICS began an internal gold trade, it is entirely possible, and plausible, that the nations involved with the trade could back their currencies with a gold standard, effectively taking the US Dollar out of dominance. Is this the beginning of the end of American dominance?
Russia and China, arguably the most powerful nations in BRICS, have been importing and producing gold in great amounts. In 2016, China was ranked as the second largest importer of gold, according to the Observatory of Economic Complexity. In 2017, China was ranked as the largest producer of gold, Russia falling closely behind as the third largest producer, according to World Atlas. The United States does not fall within the top five importers of gold and is ranked as the fourth largest producer of gold. Falling behind Russia and China in terms of producing gold as well as falling behind China in terms of importing, it is evident that the United States is heading down a dark, scary road, with only an ineffective flashlight to guide the way.
What is this ineffective flashlight? It is COMEX, the division of the New York Mercantile Exchange that is responsible for trading gold. Claudio Grass, “a Mises Ambassador and an independent precious metals advisor based out of Switzerland” as stated on the Mises Institute’s website, has talked about how COMEX is not efficient at trading gold. According to Grass, “OTC and COMEX are working toward their own destruction.” He has also stated that “the paper scams in London and New York will either blow up when the paper price of gold drops to zero or when just a fraction of investors insists upon receiving physical gold in return.” Currently, the international price of gold is determined purely by the two major markets that use paper gold: COMEX, and London’s OTC. With BRICS accounting for 40% of the population and around 22% of the world’s gross product, it is likely that the value of gold would surge following the establishment of a gold trade that uses physical gold.
Peter Schiff, an economist credited with predicting the recession of 2008, has said, “at some point, the price [of gold] is going to explode because there is real physical buying, and all that paper selling can’t camouflage that.” If Schiff’s prediction is correct, the United States is going to face a major crisis in the gold trade. This leaves a very important question: When will BRICS start implementing their gold trade?
Sergey Shvetsov, the First Deputy Chairman of the Bank of Russia, attended Russia’s annual “Russian Bullion Market.” According to BullionStar.com, Shvetsov has
“reaffirmed that the Bank of Russia has now signed a Memorandum of Understanding with China on developing a joint trading system for gold and that the first implementation steps in this project will begin in 2018.” While it may take a few years for the BRICS gold trade to begin, those in the United States, as well as other western nations with fiat currencies and paper-based gold trades, should prepare for a possible collapse of the western gold trade, as well as fiat currencies. With the large stockpile of gold in BRICS nations, we could see the end of western dominance in the world economy and the rise of the east.
President Franklin D. Roosevelt ended the gold standard in an attempt to pull the United States out of the Great Depression, not knowing he would be setting the nation up for another economic crisis. If the US Dollar does not become backed by a gold standard, the currency will face a real threat of becoming inferior to the currencies of the BRICS nations. The COMEX and London gold trades will fail, and the general populace of the United States will turn to other currencies that are more valuable, like Bitcoin or the Chinese Renminbi. The United States government cannot “ensure freedom” in China, nor can they do it in Russia. President Trump wants to “Make America Great Again”, but to do so, he needs to beat Russia and China in their goal to “Make Gold Great Again”.