Five of the most powerful nations have decided to trade using their own currency. How does this impact you and what can you do to prepare?
Unless you are under a rock, you would know that the 2006/2011 BRICS have stepped up their game.
An Alliance between:
Brazil – exports mostly Iron, Petroleum, Soybeans
Russia – Petroleum, Petroleum and more petroleum plus Gold
India – exports mostly drugs and pharmaceuticals, and electronics
China – exports electronics, clothing, machinery and equipment
South Africa – exports gems and precious metals, oil and iron
The countries who have signed this alliance have decided to stop trading in the world’s great almightly US Dollar.
‘Wen Merica Sneeze Jamaica ketch pnuemonia’
If you have ever heard the statement “When America sneezes, Jamaica catches a cold,’ please note that this is in fact a fact. No matter how good our business policies, once we depend on the USD dollar for trade such as acquiring raw materials, we are at the mercy of their fiscal policies and outcomes. The BRICS has essentially decided to trade in their own currency, threatening the over 60 years of USD reign as the World Reserve Currency, the fluctuations of which would’ve seriously hurt or debilated economies of many many countries, including Jamaica. The stronger the USD gets is the more expensive it becomes to do every single thing. Down to our already 5th highest in the world electricity charges…our JPS bill increases too.
When a country trades in their own currency it has quite a few benefits:
- Reduced Transaction Costs: When you trade in your own currency, you eliminate the need for currency exchange, which can save you a lot of money in transaction fees and exchange rate fluctuations.
- Reduced Currency Risk: Trading in your own currency also reduces currency risk, which refers to the risk of fluctuating exchange rates. When you trade in your own currency, you eliminate the need to worry about exchange rate fluctuations, which can significantly impact the value of your trades.
- Better Knowledge of Local Market Conditions: By trading in your own currency, you have a better understanding of local market conditions, which can help you make better trading decisions. You are more familiar with the economic and political factors that affect your currency, which can help you make more informed decisions.
- Faster Execution: When you trade in your own currency, your trades can be executed more quickly. This is because you do not need to wait for currency exchange to take place, which can delay the execution of your trades.
- Improved Tax Efficiency: Trading in your own currency can also improve tax efficiency. This is because when you trade in a foreign currency, you may be subject to foreign tax laws, which can be complex and difficult to navigate. By trading in your own currency, you can avoid some of these tax complications.
An increase in countries trading their own currency could result in a weakening of the USD, and a loosening of grip on the Jamaican economy (now is a great time to negotiate your salary to a JMD amount, as you will be seeing less and less on the transfer notification if you continue to be paid in USD).
Ok, So what does this mean for the average Jamaican?
- Hyperinflation to hit USD could result in less remittances. Remittances represent 25% of GDP in 2021. (this is a huge red flag, local production needs to improve NOW) This would mean less money to circulate in the country, which would reduce inflation. (Heart Trust is Free now…PLEASE go get a skill, get ready to go out there and make some money!)
- Reduced inflation could signal a reduction in prices for locally produced goods (let me whisper this one softly and cross my fingers, toes and hairs on my head).
- Increased opportunities for local businesses to supply the demand for USD based products. (lets hope Jamaicans catch on to this quickly and reshape their appreciation for locally produced products and services)
- Increased opportunities for the export of Jamaican lifestyle. Americans may not be able to travel as much, as these may be too expensive for them to maintain with the high inflations that they are projected to experience. (So if you are looking for a sign to create and export Jamaican content…ah it dis!) You know they love us like tastee patty!!!) Incidentally the MoT should perhaps look to niching their markets for more high-end customers that can afford to travel, while plumping up the Jamaican experience…to include the support of Jamaican Youtubers and Influencers (Cuz we out here, all hands on deck)
- Look out for and support innovative IPOs. If you have a company that you are confident will do well please do not be afraid to seek public funding via listing on the stock market! As a matter of fact…(HOW DO WE NOT A CROCODILE PIT – AKA SHARK TANK – I trademarking yere…doan mek mi affi call mi lawya)
The jury is out, and you should do your research, the BRICS is changing the face of the world economy and you should not be surprised but more so prepared.
There is no time like the present to ensure you are poised to take advantage of the great finanicial opportunity of this decade. Here are a few important things to consider personally:
Are you ready to invest?
Investing before you are ready could lead to some super frustrating false starts (Ask me I can tell you 🙁
To know when you are ready to invest, please check the boxes below, if you do not have ALL the boxes confidently checked, book a consultation using this link and lets go through it…painfully ofcourse: https://calendly.com/thepracticaladvisorja/30min
- Do you already have your:
- Emergency Fund of 6-12 months expenditures
- A buget and expenditure tracking system
- Skills or opportunity to earn multiple sources of income
- Life Insurance approximatley 10 times your annual salary
- Critical illness insuance approximately 5 times your annual salary
The greatest time to be alive is now, and all around are fertile opportunities for us to make the best of this time!!!
Mek Sense!?
