BRICS don’t threaten the dollar, the US does – and this reality is actually becoming increasingly clear as America’s own domestic policies are accelerating what many fear could be a US dollar collapse. While analysts focus on external threats from the expanding BRICS bloc, the real danger comes from within, right now.
The decline of American power stems from a crisis of US democracy and also fiscal recklessness that’s fueling a global shift from dollar dominance. At the time of writing, the US national debt has ballooned to over $36 trillion, along with annual interest payments exceeding $1 trillion.
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Why America’s Own Crisis Fuels Dollar Collapse And Global Shifts
Fiscal Irresponsibility Undermines Dollar Credibility
The numbers tell a story of fiscal recklessness that would be unsustainable for any other country, actually. While other nations maintain strict fiscal discipline, the United States continues to run jaw-dropping deficits. This asymmetry has been highlighted by Nobel laureate economist Joseph Stiglitz, who stated:
“The dollar-based system has become inherently unjust and unstable – especially for emerging economies that must endure volatility they did not create.”
The situation has been made worse by open-ended military aid to Ukraine and Israel, which is further eroding confidence in the US fiscal outlook. As economist Jeffrey Sachs has frequently commented, Washington’s ongoing weaponization of the dollar through financial sanctions is pushing nations to seek alternatives. BRICS don’t threaten the dollar, the US does through its own deficit spending policies, even more so right now.
Democratic Institutions Under Strain
The crisis of US democracy is also playing a significant role in undermining global confidence, along with other factors. According to recent surveys, most political scientists now agree that the current administration is turning the United States government into an autocracy at an alarming pace. This creates uncertainty about America’s long-term stability and actually accelerates the decline of American power.
When political loyalists replace civil servants, and when the administration threatens to use institutions like the IRS as political weapons, it sends a clear message about the reliability of American leadership. America’s allies and trading partners are noticing this internal political turmoil, which is accelerating the global shift from dollar dependence even more.
Global Response Accelerates Alternatives
Nations seeking monetary sovereignty have met the decline of American power with a determined response, actually. BRICS nations have already surpassed the G7 in terms of purchasing power parity, and they’re increasingly conducting bilateral trade in national currencies. India and Russia are now trading oil in rupees and rubles, while China and Brazil have established settlement mechanisms in yuan and Brazilian reals.
Kenneth Mohammed stated:
“De-dollarisation is not a threat to global stability. It is a rebalancing – one that demands fairness and equity.”
It is not only in BRICS countries though where people are shifting out of dollar. Even within Africa, such leaders as Ibrahim Traorde of Burkina Faso have formally indicated their ambitions to quit using the CFA franc. In Europe, too (Italy and Germany) there is renewed voices to repatriate part of the gold held in the US.
The thing is that BRICS are not a threat towards the dollar in the ways the US is creating and acting towards itself, at this moment. The superiority of the US dollar has always been based on confidence and America is killing its own superiority by taking its own decisions.
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The issue is not whether US dollar collapse will occur but when would the world have made it without the US in the lead. Nations are exerting their own financial authority and challenging the law of the game that Washington has operated in its favor way too long, in fact.