Patriot,

With so many unprecedented crises taking center stage in our
politics today, it's easy to overlook what goes on outside of our
country.

But indeed, the development of a new multinational economic bloc
of countries dedicated to ending the hegemony of the U.S. dollar
will have profound implications for our country, economically and
politically.

As I explain in my latest column - read it below - the expansion
of the BRICS (Brazil, Russia, India, China, and South Africa) is
a remarkable turn of events.

Most notably, Saudi Arabia and the United Arab Emirates are not
only turning their backs on the U.S. but forging relationships
with Iran. With all three of them joining BRICS this past month -
and Egypt, Ethiopia, and Argentina to boot - we're witnessing a
new global challenge to the entire financial system controlled by
the Fed.

As I warn below, this will mean tough times are ahead - but it
could mean a return to a true free-market economy and monetary
system once the Fed is no longer able to feed our addiction to
welfare-warfare spending.

Read the column below, and if you support Campaign for Liberty's
efforts to rein in the out-of-control Fed, please support our
work with a contribution.
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For Liberty,

Ron Paul

Will BRICS Smash the Dollar?

Donald Trump's legal troubles, the possibility that Joe Biden
will face an impeachment inquiry, and other stories related to
the upcoming presidential election, caused the American media to
miss a story of potentially greater significance. This was the
decision of the BRICS, who formed their alliance to challenge
U.S. political and economic dominance, to induct six new
countries into their group: Argentina, Egypt, Ethiopia, Iran,
Saudi Arabia, and the United Arab Emirates.

One way the BRICS hope to achieve its goals is to undermine the
foundation of U.S. power: the dollar's global reserve currency
status. Brazilian President Luiz Inacio Lula de Silva called for
BRICS nations to create their own currency, while India is
pushing to have its trading partners, including Russia, trade in
Indian rupees rather than U.S. dollars. China and other BRICS
countries have also reportedly taken steps to explore using gold
instead of dollars for international trade.

After then-President Richard Nixon severed the link between the
dollar and gold in 1971, Henry Kissinger negotiated a deal with
Saudi Arabia where, in exchange for U.S. diplomatic and military
support, Saudi Arabia would use dollars for its dealings in the
international oil market. The "petrodollar" is the backbone of
the dollar's reserve currency status. Early this year, Saudi
Arabia signed a deal with Brazil to accept Brazil's currency
instead of dollars for oil purchases. If Saudi Arabia signs
similar deals with other BRICS nations it will hasten the end of
the dollar's reign as reserve currency.

The rejection of the dollar is also being driven in large part by
resentment over the "weaponization" of the dollar's reserve
currency status. The U.S. government uses the dollar's reserve
currency position in order to force other countries to comply
with U.S. sanctions against the latest "designated Hitler."

Sanctions are an act of war, so by forcing other countries to
follow U.S. sanctions the U.S. Government is dragging them into
conflicts that are not in their national interests. It was
inevitable that the arrogance of our foreign policy elite would
eventually cause a backlash. The backlash started last year when
the U.S. demanded other countries join in sanctioning Russia,
regardless of the effects of those sanctions on their own
economies.

The movement to replace, or at least create alternatives to, the
dollar is also driven by concern over the long-term effects of
the massive U.S. national debt.

Despite the claims of both parties that the recent debt ceiling
deals showed that Congress and the President were getting serious
about being fiscal responsibility, the U.S. $33 trillion debt is
still poised to grow by as much as $115 trillion over the next 30
years. Congress and the President refuse to cut spending in any
area. They can't even manage to stop shoveling billions into the
no-win war in Ukraine even though this spending is opposed by a
clear majority of Americans.

Sadly, it will take a shock like the rejection of the dollar's
reserve currency status and the resulting dollar crisis to force
the U.S. government and the people to take steps to kick their
addiction to welfare-warfare spending and fiat currency. This
will mean some tough times ahead. However, the economic downturn
may not last as long as people expect.

The good news is the crisis could lead to a return to limited
constitutional government, a true free-market economy free of
corporations and cronyism, a foreign policy based on peace and
free trade, and a free-market monetary system.
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The mission of Campaign for Liberty is to promote and defend the
great American principles of individual liberty, constitutional
government, sound money, free markets, and a constitutional
foreign policy, by means of education, issue advocacy, and
grassroots mobilization.

© Campaign for Liberty, 2012. Paid for by Campaign for Liberty
and not authorized by any candidate or candidate's committee.

Because of Campaign For Liberty's tax-exempt status under IRC
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contributions are not tax deductible as charitable contributions
(IRC § 170) or as business deductions (IRC §
162(e)(1)).

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