As the BRICS bloc grows in power and U.S. debt surges, de-dollarization has become a hot topic. But according to one analyst, while many are focusing on alternative currencies or digital assets, the real de-dollarization option is actually gold.

Mathematical statistician Nassim Taleb said on the social platform: "People don't see the real de-dollarization that is going on. This is not a problem of trade settlement. Transactions are denominated in US dollars as an anchor currency, but central banks (especially BRICS countries) have been reserving gold."

“Gold is up about 30% year-on-year,” Taleb stressed.

Luke Gromen, founder and president of Forest for the Trees, responded to Taleb’s post with the following chart, noting: “This process has been quietly underway for a decade; it became more visible after the 2022 sanctions on Russian reserves.”

Gold holdings increased, while U.S. Treasury holdings decreased

As Grohmann said, the discussion about de-dollarization has been on the rise in the past few years. The US decision to freeze Russian assets after the outbreak of the Russia-Ukraine conflict was a wake-up call for countries that hold a large amount of US Treasury bonds as reserves.

Geopolitical and financial analyst Angelo Giuliano also posted the same chart as Grohmann and commented: "De-dollarization is happening."

He added: “Instead of buying U.S. debt, countries are buying gold. The dollar Ponzi scheme is collapsing and the U.S. privilege of unlimited money printing is over. Gold hit a record high today (September 12) with an annual return of 30%, and this is just the beginning.”

Social platform X user The Parabolic responded to Taleb's post by saying: "The emerging monetary order can be summarized by the three functions of money: store of value, unit of account, and medium of exchange."

It is historically unusual to have the dollar and U.S. debt fulfill all three roles at once. Between 1922 and 1971, Anglo-American powers removed physical gold from its function as an international store of value. They replaced gold with government promises (paper money, bonds, etc.), creating a debt system that was extremely unstable and required constant patching to avoid collapse.

The Parabolic concluded: “Taleb shows that while the dollar can be used as a medium of exchange and unit of account, its role as a store of value is being questioned. The BRICS hopes to take us to a financial system that resembles our tradition but adapted to the modern economic environment.”

Referring to Taleb’s point about transactions being denominated in dollars, author Richard Turrin noted that “the high share of trade settlements in dollars is increasingly meaningless as many countries increase their gold reserves and the growing popularity of trading in other currencies is not reflected in SWIFT statistics.”

“The United States will continue to brag about the high percentage of the dollar used in trade until the end,” Tournant said.

According to the World Gold Council’s 2024 Central Bank Gold Reserves Survey, 29% of respondents plan to increase their gold holdings over the next 12 months, the highest percentage since the survey began in 2018.

Additionally, 62% of respondents believed the U.S. dollar’s ​​share of total reserve assets would decrease within five years, up from 55% in 2023.

The survey showed that central banks are increasingly turning to gold for their reserves as they see a shift taking place in global financial markets and the dollar's role as the world's reserve currency continues to weaken.

The article is forwarded from: Jinshi Data