Tag Archives: BIS

BRICS, End of the Dollar?

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In my last post, When Various Monetary and Market Forces Converge, we looked at Basel III. As you can see from the description below, these changes have a major impact on risk management and the QUALITY of capital banks are holding. While these rules go into force on July 1st, arriving at the “third of the three Basel Accords” has taken a while.

[Basel, Switzerland has been the home of The Bank of International Settlements, the central bankers bank, and arbiter of global banking regulations.]

The next B we must look at, happens just days after the Basel III, an annual BRICS meeting that takes place in Rio de Janeiro on July 6-7.  Let’s dive in.

Aircraft Carriers, Not Speedboats

When we think of “the market”, most people think of stocks. When we think of money, most Americans think of cash. Cash is classified as “risk free”. Stocks are “risky”. Yet, the value of a currency is always changing in international banking and trading, just like stocks.

To gain a better understanding of where world finance arrives as the BRICS nations meet in July, we must examine changes that have occurred at the aircraft level over years, not days.

While there are many brilliant individuals watching and speaking about this BRICS meeting and their objective of reducing the dollar’s dominance in world trade, my comments have been influenced heavily from writings of James Rickards recently, and his book mentioned in the last post, The Death of Money (2014). 

What are BRICS objectives

[Source: The Rio Reset: Inside the BRICS Scheme to Hotwire the Global Economy, Birch Gold Group, May 23, 2025]

  • Their main objective has been to gain power on global governance. This includes a pursuit of expanding the UN Security Council to include Brazil and India. The council would have to approve this increase to 7 seats, which if approved would give the BRICS nations 4 seats, a majority. (pg 147, The Death of Money, 2014)
  • BRICS supports the SDR (Special Drawing Rights) of the IMF as a replacement for the US dollar.
    • We welcome the discussion about the role of the SDR in the existing international monetary system including the composition of the SDR’s basket of currencies. (pg 149, ibid)
  • Rickards boils this down to one theme: “the diminution in the dollar’s international role and a decline in the ability of the United States and its closest allies to affect major forums and in geopolitical disputes. (pg 150, ibid)

What are NOT BRICS objectives for this Summit

  • The BRICS nations do not have a free-trading area like the European Union except on a bilateral basis. (pg 147, ibid)
  • BRICS will not be announcing a new currency. (The BRICS Go Their Own Way, James Rickards, The Daily Reckoning, 5/31/25)
  • Since there is no unified currency for the BRICS like the EU, the concept of a regional currency backed by gold is not in the works.
  • BRICS does not have a military alliance like NATO.
  • There is nothing on their agenda about abandoning the US dollar.

What trends of the BRICS nations will continue

Big for US, Big for BRICS

  • With all the remarks about the end of the US dollar, it still represents 60% in global banking reserves and 80% of global energy purchases.
  • BRICS have been massively building up their supply of gold, a Tier 1 asset for their central banks. Below are changes in official holdings since 2009. ((The BRICS Go Their Own Way, James Rickards, The Daily Reckoning, 5/31/25)
    • Russia – gold reserves have increased from 531 metric tonnes (mt) to 2,333 mt.
    • China – increased gold reserves from 600 mt to 2,293 mt
    • Indian – increased gold reserves from 358 mt to 880 mt

Conclusion

The biggest problem with the financial picture we are all watching today, is that these 4 major countries – Germany, France, Japan, and the United States – have seen their major stock indices reach their highest levels ever in June 2025, or have stalled in the last 15 months. This does not mean they will not continue to climb over the short term. However, when we consider that we are now 16 years since the 2009 low, AND we have yet to see a decline in the S&P 500 last more than 7 WEEK period, RISK planning must be on every investors mind.

Will the stricter capital requirements by the Basel III requirements and the actions of BRICS nations in the second half of 2025 have a major impact on global financial markets?

My next post will be the last B, bonds. We will return to trends I have talked about since 2020. They are like gravity, a force that is above the power of mortals to control.

 

Who has directed the Spirit of the LORD, or as His counselor has informed Him?

With whom did He consult and who gave Him understanding? And who taught Him in the path of justice and taught Him knowledge and informed Him of the way of understanding?

Behold, the nations are like a drop from a bucket and are regarded as a speck of dust on the scales; Behold, He lifts up the islands like fine dust.

Isaiah 40:13-15

When Various Monetary & Market Forces Converge

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Over the last several months I have been collecting articles as well as watching market patterns from a variety of experts. Some are newer to me than others, but all have a long history. Because I see these trends converging as we go into the 3rd quarter this year, I feel compelled to share this collection of patterns with you now. For me, these are so large that collectively, they could have a global, if not historical, impact.  

Since you are reading this, I doubt this sounds like hyperbole from what we have watched since 2020. Some trends span not only years, but decades. If we had time, we could unfold trends going back centuries, or millenniums if we wanted to learn from antiquity, but we must move on.  

The “Golden” Rule Change at the Top of Central Banking

 On July 1, 2025, the Bank of International Settlements, the global hub of all central banking, are set to make changes in what is known as Basel III, a set of capital requirements on banks globally. According to Scottsdalemint.com, these are certainly needed:

The much needed change strengthens bank capital requirements, limits leverage, and increases liquidity standards to reduce financial risk and enhance banking system stability.

Wow, and the world’s highest banking officials could not figure out that all the DEBT THEY financed and fueled between 2008 (Global Debt $173 trillion) and the end of 2024 ($318 trillion) might just create too much leverage and instability?

We learn that this huge change is set to go into effect on July 1, 2025. It warned all bankers and central bankers in 2021 that PAPER GOLD assets would not be seen on their books the same as PHYSICAL GOLD. The following is from an article on the US Gold Bureau website dated March 2021.

Previously, banks could hold gold on their balance sheets in the form of unallocated paper gold contracts without holding physical gold in tangible form. These paper contracts were considered as “good as gold” when it came to determining how much capital a bank needed to maintain on its balance sheet. Under the old rules, there was little incentive to hold physical gold, as it was only valued at 50% for reserve purposes. Basel III rules move physical gold from being considered a Tier-3 asset to being considered Tier-1, which allows physical gold in bullion form to be counted at 100% value for reserve purposes. Gold in unallocated paper contracts will no longer be considered an equal asset. For this reason, banks using paper forms of gold to help meet reserve requirements will have to convert those positions to physical metal, or risk becoming too undercapitalized to continue to function. [Bold and italic text mine]

[Source: Scottsdalemint.com/ Basel III Countdown: The Gold Crisis Banks Can’t Hide, 3/10/25]

While you may have come to believe early this spring that the gold flown into New York banks from the London Bullion Banks was from fear of future tariffs, the coming of Basel III regulations moving gold to a Tier 1 asset, combined with gold prices climbing sharply since 2023, FORCED them to eventually close out short positions in the gold FUTURES markets, thus having an immediate impact on them.

Consider these numbers from an article by Doug Casey’s International Man: The Gold Rush You Weren’t Supposed To Notice and the Next Big Monetary Reset. Every retail investor and retail advisor should examine this information and these actions by the world’s largest and most informed banks right now.

Last year, central banks purchased approximately 34 million ounces of gold, marking the third consecutive year of near-record buying….

Central banks and governments are the largest single holders of gold in the world. Together, they officially own over 1.2 billion troy ounces—out of the 6.9 billion ounces humans have mined throughout history.

Russia and China—the US’s top geopolitical rivals—have been the biggest gold buyers over the last two decades.

As we come through June 2025 and head into the 3rd quarter, I think about these words written in James Rickards 2014 book, The Death of Money: The Coming Collapse of the International Monetary System.

“Most profoundly, a new gold standard would address the three most important economic problems in the world today: the dollar’s decline, the debt overhang, and the scramble for gold.” [page 241]

Think about those 3 things: debt overhang, dollar decline, and scramble for gold. That was 11 years ago. Are these huge issues not even more impactful on our world in 2025?

In Part 2 of this 3-part series, we will look at the debt overhang and the BRICS as we move toward a term we must understand, a multipolar monetary system. The BRICS meeting in Rio de Janeiro, Brazil on July 6 and 7 may be as important to watch as the reaction to the implementation of Basel III bank changes that goes in effect on July 1st.

I know these are huge trends and issues we cannot control. However, they are influencing the world we live in and our lives. We must investigate them. We must seek to understand how they could impact us.

Back soon.

“Nothing in all creation is hidden from God’s sight. Everything is uncovered and laid bare before the eyes of Him to whom we must give account.” – Hebrews 4:13