A currency developed by BRICS countries is the latest supposed challenger to the dollar as the world’s largest reserve currency.
Yes, the countries involved – Brazil, Russia, India, China and South Africa – are major players worth watching. But on the latest episode of The Tex & Rooster Show, analysts Ryan Ricci and Taylor Burnette call this out for what it is: a splashy, non-actionable headline designed to appeal to investors’ emotions.
“The news of all this stuff always comes out around the lows,” Ricci explains. “The dollar, which was on a tear last year, comes down lower in mid-July, so of course you get people saying, ‘Oh, the dollar’s gone,’ because it’s all clickbait.”
There’s nothing financial “news” sites love more.
Case in point: a recent Bloomberg article titled, “Dollar’s Busted Bull Run Has Bears Calling End of an Era.”
The article begins:
“It just may have been the week that broke the dollar. The greenback’s worst slump since November has a bevy of strategists and investors saying a turning point is finally at hand for the world’s primary reserve currency.”
“Let’s think of the timing of when the headline comes out,” Burnette adds. “That’s post a horrendous China number print and them saying, ‘Let’s not report any more employment data about youths in China.’”
Many currencies have been billed as the next big thing in the past. Many more will be in the future. What's important is to trust your investing process and ignore mainstream media's attempts to incite FOMO-driven buying and selling.
“Let’s say Bitcoin goes up from here,” Ricci says. “Guess what the headline will be? Bitcoin Will Replace the Dollar. If gold goes up, it’ll be, Gold Will Replace the Dollar.”
He adds: “They just take the color of the screen, they play into your emotions and now it’s just clickbait for people.”
