I hate to be the bearer of bad news, but it looks like India and Russia, two big members of BRICS, have decided to ditch the U.S. dollar in favor of payments worth $4 billion in their local currencies. This is going to deal a sizable blow to our economy, which, I’m sure you’ve noticed, is bleeding profusely under the failed leadership of President Joe Biden. If you’ve been oblivious to just how bad things are around these parts, take a short jaunt to the supermarket. You’ll get the picture.
According to Watcher, Russian exporters have bought Indian made arms and equipment for defense purposes and have cleared the payment for these items using the rupee in stead of the dollar. In fact, the report reveals the dollar had no role whatsoever in the trade, which means only local currencies reaped the benefits of the deal.
The BRICS alliance kick-started the de-dollarization agenda and is moving in the direction of using local currencies for cross-border transactions. Read here to know how many sectors in the US will be impacted if BRICS ditches the dollar for trade.
The Russian exporters held $8 billion in reserves in India’s special Vostro bank account for global exchange of trade settlement. Now, 50% of the funds have been used to settle arms payments in the rupee with India. Another $4 billion is parked in the account and a new trade settlement could be initiated in the coming months. The development gives the local currencies of BRICS a boost in the global market and not the US dollar.
On the other hand, India is also settling local currencies for its BRICS counterpart Russia through the special Vostro accounts. “Indian exports are also being settled from the Russian funds from the Vostro account,” said an official on the condition of anonymity.
BRICS has not been shy about their current de-dollarization initiative, which both Russia and India are clearly a part of. The group’s ultimate goal is to get away from the dollar and replace it with local currencies, meaning the dominance of the U.S. dollar across the world is fading fast as it continues to take a nosedive in value. The purchasing power of the dollar has dropped insanely low thanks to skyrocketing inflation rates and super high interest rates.
Bidenomics at its finest.
We will have to wait and watch how both the BRICS countries plan to settle another $4 billion from the Vostro account. The US dollar is the only currency that receives a hit as developing countries settle trade in local currencies.
One of the many reasons we’re experiencing so much inflation and de-valuing of the dollar is because of the insane amount of spending our government is doing. They are burning through cash for all sorts of frivolous projects — most of the time the money earmarked for these “works” are going straight into the pockets of the politicians, which is why so many of them come out of public service as millionaires — and since they don’t actually have the funds to pay for all of it, they just print money.
The more money is printed, the higher inflation, and the less the dollar is worth. Which leads to a spike in the cost-of-living and the whole mess starts over. It’s a destructive circle that is slowly killing the American dream.
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