Last week I wrote about the BRICS countries adding 6 new members. In looking at the members that have been added it is apparent that the main reason that these countries were added was very strategic. Many have said that the new acronym should be BRICS+ OPEC. Besides Russia, the other 4 members of BRICS are net energy importers. As the global south tries to reduce the influence of the west on their affairs one key component would be to have the raw materials, energy and food all traded amongst themselves and not have a middleman included (US dollar).
To this end they added Saudi Arabia, Iran and United Arab Emirates. These are major oil producers, and the idea is to purchase oil and gas in local currencies. In addition, they added Argentina- a major agricultural producer and the largest producer of natural gas in South America. While you may be wondering why Egypt and Ethiopia were added it is because Egypt controls the Suez Canal- a MAJOR shipping route and Ethiopia is home to the fastest growing economy in Africa in is home to the African Union Headquarters. Keep in mind that most of Africa is trying to join this group. In all, 41 countries have shown interest in joining this economic bloc.
Just with this initial expansion here are some interesting numbers:
- The bloc, as of 1-1-2024 will account for nearly 30% of global GDP.
- It will include 46% of the world’s population.
- It will comprise 43% of world oil production (most of which will be paid for with non-dollar currencies)
- 25% of all exported goods are represented.
- Keep in mind that another 30+ countries are interested in joining and, if and when that happens nearly 70% of the world’s population will be represented. As a matter of fact, formal requests to join have already been made by Algeria, Cuba, Indonesia, Palestine and Viet Nam. Other notable countries expressing interest are Mexico, Venezuela and many others.
I believe that the death warrant for the US dollar has been signed. It is only a matter of time until the sentence is carried out.
While the sanctions on Russia have sped up the process, I believe that this was inevitable because the rest of the world can clearly see that the things that made our country great and a reliable partner cease to exist today.
First of all- THE RULE OF LAW where you can expect equal justice no matter who you are – obviously gone. Rules in effect at the time of your decision would have been grandfathered not that long ago and now rules have been changed retroactively to the benefit of the state and to the detriment of the people. Our strong work ethic and the ability to get things done. Waning big time.
As a matter of fact, there is a person named James Gorrie who wrote a book about the unsustainability of the Chinese economy. In an article on Zerohedge he explains why “The China Crisis” has finally arrived.
While what he says about China may be true, but I am SURE that the USA has them beat in a few areas.
#1 Excessive overuse of factors of production. I won’t pretend I know exactly what that means but since we don’t produce much of anything anymore all I can say is at least they are producing real goods instead of conjuring up cash and pretending that something of VALUE has been created- which it obviously hasn’t been.
#2 Inefficient Allocation of Economic goods and activity. I am pretty sure that the USA has them beat on this one with $10 TRILLION blown to prop up the economy just since 2020. How much more inefficient can you get than to go into debt so that people can consume while producing NOTHING? That’s not to say China doesn’t do somewhat the same thing but not to this level.
#3 Stifling innovation and the middle class. Again, the USA had the most robust middle class ever. It has been systematically destroyed by inflation and the pace of extinction is ramping up. Red tape, rules and regulations have been put in place to stifle competition (which leads to stagnation and the suppression of companies that could be more efficient) to empower those who, in many cases, are dinosaurs in the industry that, if challenged fairly probably couldn’t compete. Same in China?
#4 Rampant Pollution. I am glad to say that here is one area that they have us beat on and hopefully it will stay that way.
#5 DEBT BASED GROWTH- I really have to laugh at this one when our US GDP INCLUDES government spending (DEBT) in GDP- to the tune of 34% of GDP. Debt is counted as growth and in our case a lot of our debt is going towards consumption- which means there will be no income stream to ultimately retire that debt while at least China is building infrastructure which will at least leave them with something to show for it.
#6 Lack of Enforcement, Regulations and Standards. I guess here it depends upon whom you know and how important you are to the next political campaign as to whether rules are enforced or not. It certainly appears that “standards” depend upon your standing here in the USA and I would assume the same in China.
#7 Dystopian Depression Among the Young generation. I imagine that this would be the same in both countries as what I see here is that housing is mostly unaffordable for our upcoming generation. The “money” they work for is getting debased at a record pace and many have to work 2 or 3 jobs just to live. Not exactly the American dream
I guess my main point here is that if anyone thinks that China is unsustainable why in the world would you think that what we are doing can last?
The BRICS + see all of this and they are voting with their feet. They are forming alliances, loading up on gold and hard assets and are ushering in a system where everyone is treated fairly (or so they are saying anyway).
At least China is forming mutually beneficial alliances and acting as a partner rather than an adversary. They are hoarding minerals, food, gold, silver and other things that will still have value when the western-backed ponzi scheme collapses. In my mind the only question- and it is a great one is … When?
I would rather be years early than a minute late.
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