Time in the Market
               Not Timing the Market

THE ‘UNIT CURRENCY’ .. Shhhh, DON’T TALK ABOU IT

I once dismissed the notion of a new global currency with the same casual disdain most reserve for outlandish conspiracy theories. The idea that the dollar, the bedrock of international trade, could be dethroned or that nations would abandon it for something else seemed not only impractical but absurd.

However, over the past few years, and particularly in 2024, my thinking has evolved. I’ve watched the slow, creeping shifts in geopolitics, trade, and currency markets, and I’ve come to the realization that while improbable, the emergence of a new global currency is not impossible. And more significantly, what if it happens?

The Dollar’s Long Reign and Growing Discontent

For decades, the US dollar has held an unparalleled position as the world’s reserve currency, backed by the strength of the American economy, the size of its financial markets, and the role of the US in global trade. However, recent trends show a growing desire among many nations to break free from the dollar’s dominance.

Countries like Russia, China, and even India have started exploring alternatives to reduce their dependency on the dollar, as they find themselves vulnerable to US monetary policy, economic sanctions, and geopolitical tactics​. INN Seasia Consulting

I used to believe that such efforts would be minor and inconsequential. After all, the dollar’s position seemed invulnerable—held in central banks around the world, used in commodities trading, and viewed as the gold standard for global liquidity. But as I watched the world navigate through trade wars, escalating sanctions, and the weaponization of the dollar in geopolitical struggles, my view began to change.

The announcement by BRICS nations (Brazil, Russia, India, China, and South Africa) in June 2024 to launch a new currency, backed by gold and a basket of their respective currencies, marked a turning point for me. It was no longer an academic or hypothetical debate. This was a real, tangible movement by some of the world’s largest economies to reshape the global financial order​ Birch Gold Birch Gold

The Birth of a New Currency: “The Unit”

Initially, I thought that even if BRICS announced a currency, it would amount to nothing more than symbolic defiance—an empty gesture against Western financial power. But as I dug deeper, I saw that this was no rash move. The Unit, as this new currency has been named, isn’t just another fiat currency. It’s 40% backed by gold, and 60% by a basket of BRICS currencies, a structure that immediately makes it more resilient and credible than many other attempts at dedollarization​ Birch Gold .

Backing a currency with gold introduces an element of stability and legitimacy, especially during times of financial uncertainty. Historically, gold has been a hedge against inflation and currency devaluation, and this makes the Unit a serious contender on the global stage. Furthermore, by tying the Unit to a basket of currencies, BRICS ensures that it reflects the strength and economic power of multiple nations, not just one dominant player like the US​ INN.

What struck me most is how this currency is not designed to replace the dollar outright, but rather to exist alongside it, gradually reducing reliance on it. By providing an alternative in trade, particularly among BRICS nations and their partners, the Unit has the potential to chip away at the dollar’s global dominance, particularly in regions where the dollar has long been resented​ INN Modern Diplomacy.

My Shift in Thinking: What If Half the Globe Follows?

The more I researched, the more I began to wonder—what if half the globe adopted this new currency? What would it mean for the US, for Europe, and for the financial systems that have governed the global economy for decades?

In practical terms, if half the world began using the Unit for trade, the ramifications for the US dollar would be profound. First, the demand for dollars in global trade would decrease, leading to depreciation. The dollar’s privileged position allows the US to finance deficits cheaply and maintain low interest rates. If that advantage eroded, the cost of borrowing for the US would skyrocket, potentially triggering inflation domestically​ INN Seasia Consulting

Moreover, the US has wielded the dollar as a tool of foreign policy through sanctions, cutting off nations from dollar-based trade. Countries like Iran, Russia, and North Korea have been severely impacted by this tactic. A viable alternative currency would blunt the effectiveness of such sanctions, giving countries outside of Western alliances more freedom in their international dealings​ Birch Gold Modern Diplomacy

The geopolitical consequences would be equally far-reaching. We would see a shift toward a multipolar world where financial and economic power is more evenly distributed. BRICS, which represents 45% of the global population and nearly 36% of the world’s purchasing power, would become a central player in this new order​

Birch Gold

Challenges Ahead: Can It Actually Work?

As compelling as this new currency sounds, I remain cautious. The implementation challenges are vast. First, gold reserves need to be sufficiently built up in each BRICS nation, which could take years. Second, the logistical challenges of creating a new currency system—building infrastructure, regulatory frameworks, and achieving widespread adoption—are monumental. The BRICS nations have proposed a blockchain-based payment system to support the Unit, but this technology, while promising, still faces hurdles in scalability, regulation, and global trust​Seasia Consulting

Additionally, trust remains a key issue. While countries disillusioned with the US dollar may gravitate toward this new currency, convincing global institutions, multinational corporations, and financial markets to adopt it will be a slow process. The dollar’s dominance is not just about economic power but also about trust in the US financial system and its stability​ .Birch Gold

Yet, as impossible as it once seemed, the gradual erosion of dollar dominance is now something I find myself contemplating more seriously. Could we really see a world where half the globe uses a new currency? It no longer feels like a fringe possibility but a creeping reality.

A World in Transition

So, where does this leave us? What was once a fantastical notion is now creeping toward the realm of possibility. The launch of the Unit marks the beginning of what could be a monumental shift in global finance. The US dollar, while still dominant, faces challenges from nations that are increasingly tired of playing by its rules.

If half the world does eventually shift to using the Unit, the repercussions would be enormous. The global financial order would be reshaped, geopolitical power redistributed, and the US would find itself in a very different position on the world stage. While there are many hurdles to cross, this is no longer a question of “if” but “when.” We may be witnessing the slow but steady rise of a multipolar financial world, one that challenges the dominance of the dollar and fundamentally reshapes the global economic landscape.

The future is uncertain, but the path is becoming clearer. What once seemed impossible is now unfolding before us, and the world as we know it may never be the same.

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