In case you don’t know what BRICS is, it’s a coalition of countries—Brazil, Russia, India, China, South Africa, and others. There is a Western alliance of nations, the big Western economies known as the G7: Canada, France, Germany, Italy, Japan, the UK, and the US. The G7 and BRICS have sort of been formed as counterweights, however, outside of America, BRICS countries are all growing at faster rates. There’s this idea that they’ve been locked out of the global financial system, and don’t have the power that their economies deserve, so they’re kind of making their own G7 with BRICS.
Their summits like the one that is supposed to occur on October 22nd are usually more for show than substance, and from what I’ve read, Putin desperately wanted a photo op of him and Modi laughing, smiling, and shaking hands to show how close he and India are.
The main problem holding BRICS back from achieving some of their goals is that they don’t particularly like each other, but one country is playing this all pretty masterfully: India. India is both cozying up with defense pacts with America and Western nations while also building economic ties with all the BRICS nations but committing to neither. They’ve really slowed down some of BRICS’ goals, especially Putin’s and Xi Jinping’s.
Leaders like Putin need BRICS to succeed, because Russia is so isolated from a lot of western countries that they need to create their own new world order where they can thrive. Putin hosted this year’s summit, though he couldn’t attend the last event because he was wanted for war crimes. Despite hosting, Putin’s plans to make a gold-backed global reserve currency to replace the dollar is being blocked by India, who has no interest in seeing that happen.
People say that fears of the demise of the dollar were very much overstated, though demand for the US treasuries have begun to decrease. This chart shows that central banks globally, like those of Germany, Japan, Russia, and China, have been buying less U.S. Treasuries and a lot more gold since around 2012, which has driven up gold prices to all-time highs. The way I’ve seen it described, The U.S. dollar is the cleanest dirty shirt—there’s no replacement currency, but we’re running insane deficits, printing like crazy, and there’s demand for hard currency.
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