Will BRICS' De-Dollarization Crush the Middle Class? Examining the Potential Impacts

The growing movement within the BRICS nations (Brazil, Russia, India, China, and South Africa) to reduce reliance on the US dollar is sparking intense debate. A key question arises: As BRICS moves away from dollar will the middle class be crushed? The implications are complex and far-reaching, with potential winners and losers across the globe.

The Promise of a Multi-Polar Financial World: In fact, several believe that the BRICS’ latest call to challenge the dollar could help create a globally fairer, multi-currency global system. This perspective suggests that a more diverse financial landscape could reduce the dominance of the US dollar, potentially benefiting developing nations and their middle classes by offering greater economic autonomy and stability.

The Risk of Economic Instability: However, the transition away from the dollar is not without its risks. History has shown that attempts to move away from dollar dependence have often resulted in short-term economic instability, particularly among emerging markets lacking established financial systems and strong regulatory frameworks. This instability could disproportionately affect the middle class, leading to inflation, currency devaluation, and job losses.

The Rise of Alternative Currencies: As the central banks of developing countries move away from the dollar in favor of gold and their local currencies, a new monetary order could be taking shape. The allure of gold-backed currencies and increased use of national currencies in trade aims to reduce reliance on dollar-denominated debt and potentially shield economies from US monetary policy fluctuations.

Rich Kiyosaki's Bold Prediction: In a recent interview, Rich Kiyosaki predicts that 70% of the world’s population will eventually be using a gold-backed Chinese yuan as their main currency via the BRICS alliance, which he thinks will reshape the global financial order. While this remains a speculative outlook, it highlights the potential scale of the shift underway and the ambition of some BRICS nations.

Conclusion: Navigating the Uncertainties The move away from the dollar by BRICS presents both opportunities and challenges. Whether the middle class will be crushed depends on how smoothly this transition is managed, the robustness of alternative financial systems developed, and the ability of emerging markets to weather potential economic turbulence. Careful planning, international cooperation, and a focus on social safety nets will be crucial to mitigate the risks and ensure a more equitable outcome for all.