Reflections on the Current Economic Scenario: Between Globalization and De‑dollarization
Today’s challenges are not mere market fluctuations but the result of an epochal shift reshaping global power structures. Globalization and the decision by BRICS countries to challenge the hegemony of the U.S. dollar are transforming the financial landscape. The creation of an alternative currency for international payments sets in motion a de‑dollarization process that could permanently alter global economic dynamics.
💡 Historical Crises and Lessons Learned
Over the past fifty years, we have navigated extremely turbulent waters. History shows that every crisis has deep roots and recurring cycles. Some emblematic events:
🛢️ Oil Crisis and U.S.–Saudi Arabia Agreement (1973‑1974)
Saudi Arabia and the United States signed a secret agreement under which Saudi Arabia would sell oil in dollars and reinvest the surplus (petrodollars) in U.S. debt securities. This mechanism guaranteed economic stability to the United States and financed its debt, marking the start of an era of global monetary interdependence.
📉 1987 Market Crash
⚔️ Gulf War (1990)
🇮🇹 1992 and National Sovereignty
Those who experienced these episodes know that markets often overreact in the short term but reward vision and expertise in the long run.
🌍 The BRICS+ Challenge and the End of Hegemony
Today’s challenge from BRICS, now BRICS+ (Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the UAE), is not only technical but systemic. After decades of integration under Western leadership, globalization has reached a breaking point.
BRICS+ aims to reduce dependence on the hegemonic currency through:
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🔹 Alternative payment systems to SWIFT
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🔹 Bilateral transactions in local currencies (yuan, rupees, rubles)
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🔹 Projects for a new common currency backed by commodity baskets or gold
This represents the most significant shift since 1944, when the dollar was established as the global reference currency.
🏦 New Development Bank: A Pillar of BRICS+ Financial Cooperation
A key element of the BRICS+ financial architecture is the New Development Bank (NDB), formally established in July 2014 and operational since 2015, headquartered in Shanghai. The NDB was created to finance infrastructure and sustainable development projects in member and emerging economies, filling gaps left by traditional multilateral institutions.
The bank operates with an equitable governance model, without unilateral veto power, and has approved projects spanning clean energy, transportation, and digital and social infrastructure. It also promotes local currency financing, helping reduce reliance on the dollar.
Although no official cryptocurrency has been issued by the NDB, BRICS+ countries are exploring alternative payment mechanisms and international currencies based on currency baskets or assets like gold, including projects like the proposed “Unit” to facilitate international trade.
🐬 ELBY’s Note
💱 The De‑dollarization Process Underway
A clear sign of ongoing transformation came in June 2024, when Saudi Arabia did not renew the fifty‑year agreement that tied oil sales to the dollar.
De‑dollarization is no longer theoretical: although the dollar remains the primary reserve and exchange currency, its share in global central bank reserves is steadily declining. This fragmentation of the global financial system increases volatility and demands increasingly sophisticated investment strategies.
📌 Final Quotation
“A reserve currency must supply global liquidity, but such a role inevitably erodes confidence in its long‑term solidity.” — Robert Triffin, Belgian‑American economist
🔜 Coming Next Week
📅 Next week, we will explore how decades of crises have shaped the global economy and strategies to protect and preserve wealth in an uncertain world.
💡 Don’t miss it: in-depth analysis and practical advice to safeguard your investments!
✍️ Byline
Alberto Spagnoli 💼📊
Financial Advisor since 1985, CONSOB‑registered since 1990
📖 About Alberto Spagnoli
I have practiced as a financial advisor since 1985, registered with the CONSOB since its inception in 1990. Adding 40 years of advisory experience to 10 years as a bank employee (1975‑1985), I bring 50 years of continuous professional activity.
My career has unfolded through the defining phases of the modern economy:
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1975‑1985: ten years as a bank employee, experiencing double‑digit inflation and oil crises;
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1985‑present: forty years in independent financial advisory;
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1990: CONSOB registration in the year of its establishment, actively contributing to the birth of professional financial advice in Italy.