The U.S. economy is on a slippery slope with tech giants laying off employees since January 2023. The cost of living, especially in the real-estate sector, both owning and renting a property remains unaffordable to the average American.
While the U.S. dollar reigns supreme on the international stage as the global reserve currency, its status is challenged by the BRICS nations who plan to launch a new tender. Moreover, if BRICS currency becomes the only tender for cross-border transactions, it could deeply hurt the U.S. living standards.
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BRICS Currency Threatens U.S. Living Standards
The de-dollarization effect is seen as a phenomenon that’s spreading to new countries that are not part of BRICS. Arab nations, African countries, and other developing nations are eager to join BRICS and accept the new currency. Nonetheless, the U.S. dollar could take the back seat giving the BRICS currency more power if things fall into place.
Investment analyst and Bull & Bear Profits CEO Jon Wolfenbarger warned that the new BRICS currency could hurt U.S. living standards. “Due to the Russia-Ukraine war and China’s continued economic growth, the BRICS are accelerating plans to take power from the U.S,” he wrote in a blog.
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According to Wolfenbarger, the BRICS bloc is positioned better to take down the dominance of the U.S. dollar. Wolfenbarger said that countries buying gold in large numbers could back the new tender and push the dollar down. “BRICS will have a much better chance if they create a hard currency backed by gold or other commodities like oil,” he said.
“This would hurt U.S. living standards and lead to less power for the U.S. government. Similar to the weakening of the UK after World War II. All empires in history have failed, and the U.S. will not likely be an exception,” he opined.