BRICS to Launch Gold-Backed Reserve Currency

Objectivity 3.9 | Credibility 4.8 | Relevance 4.8

On Friday Kitco reported that Brazil, Russia, India, China and South Africa (BRICS) are set to launch of a new gold-backed currency and are expected to make an official announcement in August during the BRICS summit.  Forty-one plus countries have applied for BRICS membership and appear to be returning to a gold standard.  Chief economist at Degussa Thorsten Polleit said, “At first glance, a new transaction unit, backed by gold, sounds like good money – and it could be, first and foremost, a major challenge to the US dollar’s hegemony.” Treasury Secretary Janet Yellen said, referring to the role of the U.S. dollar, “I don’t see that role being threatened by any development including the one that you’ve mentioned [BRICS common currency].” However, the announcement from BRICS is the most pronounced public challenge on the global stage to dethrone the U.S. dollar as the world’s global reserve currency.