Fears were rampant in some quarters of the U.S. ahead of a recent closed-door meeting between the so-called BRICS nations.
Leaders from Brazil, Russia, India, China and South Africa met at the end of August to discuss the possibility of accepting new members into its informal organization, including Saudi Arabia.
At the end of the summit, the leaders jointly announced that Saudi Arabia would in fact be invited to join, along with five other nations: Iran, Egypt, the United Arab Emirates, Ethiopia and Argentina.
Many observers see this development as potentially “catastrophic” for the U.S. economy. Among them is Kevin from Nashville, who recently called into The Ramsey Show for advice about how to plan for the worst-case scenario.
What is BRICS and why is it seen as a threat?
BRICS came together in 2009 as an informal association of countries that regularly discuss trade, economic co-operation and security issues. Some in the West see it as intended to confront U.S.- and Europe-orbiting multilateral organizations like NATO and the G7.
Prior to the August summit, Saudi Arabia’s Finance Minister, Mohammed Al-Jadaan, had publicly stated that his nation was considering dropping the U.S. dollar as the currency it uses for trading oil, the country’s primary and most valuable natural resource.
If Saudi Arabia drops the dollar, Kevin theorized to hosts Dave Ramsey and Jade Warshaw, that “all the nations holding Treasury bonds to buy oil from the Saudis (would) ditch their dollars” by selling the bonds.
Thus, trillions worth of U.S. dollars would “come home,” as Kevin put it, effectively increasing the domestic money supply and creating conditions for “catastrophic inflation.”
The question he posed to Ramsey was: How likely is this to happen? And if it does, how do you prepare for the total destruction of the U.S. economy?
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BRICS won’t destroy the US
The theory that Saudi Arabia will join BRICS and then drop the U.S. dollar is broken for two key reasons, according to Ramsey.
First of all, he told his listeners, “the Saudis are probably way too smart to think they’re going to undermine the U.S. economy.” These countries, which represent 40% of the global population, are reliant on the U.S. economy and its vast consumer market, Ramsey argued, so destroying the U.S. would destroy BRICS in the process.
Secondly, “the idea that you can get all those communists to line up and not shoot each other is gonna be humorous,” he quipped.
The BRICS nations may be working on a scheme to destroy the dollar, but Ramsey believes it’s unlikely to happen in our lifetimes.
Ramsey went on to say that he doesn’t have “a meteorite plan.”
“I don’t have a plan for apocalypse like you’re talking about,” he said, addressing his guest. “What you would have then is a total economic and governmental collapse, and the only plan then that works is bottled water and bullets.”
Under such conditions, in which the economy as we know it ceases to exist and the government and its laws no longer have any control over society, your money would mean nothing, Ramsey said. You couldn’t even find a safe haven in gold because “no one trades gold bars in the middle of a collapsed economy.”
What they do is shoot you for your property, he said.
Control the controllables
However, he continued, all this catastrophe planning is a waste of physical and emotional energy. A better strategy, according to Ramsey and Warshaw, is to focus on controlling the controllables.
You can’t control what Saudi Arabia or the BRICS nations do, so there’s no sense in worrying about it. Instead, keep your focus on what is in your control, such as how much you spend, save and invest.
It’s understandable to be afraid of worst-case scenarios, but taking your eye off of your own financial health out of fear of the apocalypse is only going to reduce the likelihood that you experience your best-case scenario.
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