It’s been 10 years since the BRICS added a new member. If you recall it was originally just BRIC. Brazil, Russia, India, and China as an economic bloc. South Africa was the last to join and
the acronym became BRICS.
Since the USA slapped sanctions on Russia, kicked them out of the SWIFT messaging system (basically the way the producer gets paid from the buyer in international transactions) there has been growing concern that the USA will use this on anyone who does not follow their directions. As a matter of fact, not only did we freeze Russia’s foreign reserves- now we have stolen them and are pledging to rebuild Ukraine with that “money”.
On Thursday August 24th., the bloc added 6 new members of the 41 who have expressed interest in joining. They are Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and United Arab Emirates. This becomes official January 1, 2024.
While this would be big news just by itself, I believe that the MAJOR point here is that those countries that were added are major oil producers. One of the main planks of this new alliance is to trade goods in their own currencies.
Ever since Richard Nixon took us off of the gold standard in 1971, the US dollar has had basically no intrinsic value other than for trade settlement which is what has allowed us to keep borrowing and spending beyond our means for decades. This has created massive demand. In my opinion this is a clear threat to the US dollar’s perceived value. Since 1973, when Henry Kissinger set up the Petrodollar system (You price oil in dollars and we provide protection) virtually all oil was traded in US dollars. Anyone who went against it was destroyed- like Moamar Khadafi who wanted a gold-backed African currency or Sadaam Hussein in Iraq who decided to trade oil for Euros.
While a gold-backed currency was not announced the major announcement, in my opinion, is that Saudi Arabia (the lynchpin of the petrodollar system) has just switched sides. This should come as no shock as Saudi Arabia signed a protection pact with Russia just days after they saw our less than glamorous exit from Afghanistan.
Today, there is a growing number of countries who are defying the USA. Most of the global south is joining or are applying to join.
This appears to me to be like a game of Jenga where you take out pieces until the structure collapses. Which piece will be the one that starts the avalanche?
On Monday August 28th. the BRICS meeting moves to Moscow where a lot of economic items are on the agenda (Andrew McGuire on Live From The Vault).
I will keep an eye on this. Next week’s article should be full of many observations.
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