I'm Coy Wells for U.S. Money Reserve. Recently, the BRICS coalition of nations Brazil, Russia, India, China and South Africa, held their 15th annual conference from August 22nd to August 24th of 2023. At the end of the conference, the coalition announced that six more countries will join its economic bloc: Iran, Saudi Arabia, United Arab Emirates or the UAE, Argentina, Egypt and Ethiopia.
Even without these countries, BRICS represents 40% of the world's population and over one quarter of the world's GDP, according to the reports by the Associated Press. With these new additions, the BRICs coalition will double in size and include the three largest oil producing nations on Earth: Saudi Arabia, UAE and Iran. Currently, the U.S. dollar in this instance called the petrodollar, is the global standard unit of currency for trading oil.
But with the expansion of BRICs, there is concern that this may change. The petrodollar has already faced pressure this year and in January of 2023, Saudi Arabia's finance minister said the country is open to settling trade and currencies other than dollars, and in August, before the conference was underway, India purchased millions of barrels of oil from the UAE using Indian rupees instead of dollars
Outside of the oil market, the dollar has been facing challenges on an international stage. Though the dollar remains strong, recent tensions with the United States have prompted both China and Russia to move away from the currency, with China instead promoting international use of the yuan. And in April of 2023, Brazilian President Lula da Silva also publicly advocated moving away from the dollar. The expansion of BRICS as an economic bloc could make it easier for member countries to stop using the dollar for international trade, and instead use alternative currencies.
In turn, this could put pressure on the power of the dollar. Consumers looking to protect the dollar in their portfolio may benefit from turning to physical gold as a safe haven and a form of wealth insurance. Gold has long been considered a popular choice as a hedge against global economic uncertainty, as well as volatility in the dollar's relative strength.
Gold as an asset has endured the test of time, predating modern fiat currencies by thousands of years and is still being used as a store of wealth. Gold also exists outside of the traditional banking system and is independent from paper based assets like stocks. To learn more about the benefits of owning physical gold and to receive your free gold information kit, call U.S. Money Reserve and speak to one of our dedicated account executives today.
