The set of countries known collectively as BRICS, have overtaken G7 nations in Global GDP (PPP), shifting the international economic power balance. Specifically, Brazil, Russia, India, China, and South Africa are now the world’s largest gross domestic product (GDP) bloc when taking purchasing power parity into account, according to data from Acorn Macro Consulting.
I understand about 36 developing nations may be moving to BRICS. Should we reevaluate our foreign and energy policies?
This is because our govt got arrogant and started sanctioning individuals who used the dollar and now it’s not a safe place to store wealth for many people.
And who put the Magnitsky Act in place … The swamp under Obama. Man, that guy was a bad president!
The original Magnitsky Act of 2012 was expanded in 2016 into a more general law authorizing the US government to sanction those found to be human rights offenders or those involved in significant corruption, to freeze their assets, and to ban them from entering the US.
It only gets better. On March 29th a French Company settled a LNG sale to China in Yuan instead of the Dollar. The French company apparently brokered the sale of 65,000 tons of LNG from the UAE on the Shanghai Petroleum and Natural Gas Exchange. The idea here is to move these trades to the Chinese exchange, which settles in Yuan instead of on Western Exchanges, settling in dollars.
BRICS is a basket of substandard currencies (Brazil, Russia, India, China, South Africa)
Purportedly it is safe because it is diverse. (This did not work out well when tried with diverse substandard mortgage bonds. . . . remember? It worked for a while didn’t it?)
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It is not even a direct alternative to the Dollar. It is a direct alternative to the Euro.
The Euro maintains its place (second to to dollar) because it is
a basket of stable currencies
from countries with a history of good credit and strong cooperation
maintained by strict agremments against unilateral money-printing, and universal defict increases.
None of the essential elements that make the Euro work, are present in BRICS.
Right now (temporarily I assume) the Chinese Yuan pays a positive real interest rate and the US dollar pays a negative real interest rate. (Who in the heck wants to hold a currency that tomorrow will be worth fewer barrels of oil, fewer cycles fewer computer chips etc.? No one. The world never has. )
Dating back to ancient Rome (at least) always and everywhere
people, given a choice have gravitated toward holding whatever stable currency pays the highest and most-stable real interest rate.
Right now that is not the US dollar. Right now that is the Chinese Yuan.
I doubt that will continue long but if it continues 20 years, theni n 30 years the US dollar is done as reserve currency.
I can’t help that you don’t understand fundamental economics.
It might help if you kept an open mind instead of perusing through discussion for lefty zingers you can fling at people.
I say that BRICS is gaining Traction and I say EU and westernism is not part of China’s 100 year plan.
I also said (indirectly) that Biden is ■■■■■■■ up the world stage.
You have faith in the dollar, i am wondering what it will look like in a few years. Hey, you might be right. I believe we are in the middle of a change in the world order.
Like the Roman empire, great empires collapse from within.
What I have faith in is that throughout all history (Ancient Persia, or 19th century England or anything else) people with money have always stored (reserved) that money in whatever currency or asset produces a dependable positive return. (such as interest rate vs inflation.)
This year, that is Chinese Yuan and a handful of commodities.
If that continues long enough the dollar is done as the world currency.
A government scheme, even a multi-government scheme, like BRICS to entice the world to do otherwise will always fail.
we have deported too many manufacturing jobs… we will have to recreate them after our second civil war - that is if we survive WW3… it seems the war drums ring loud every other decade, but history never repeats…
