Remember all the talk about BRICS and the gold backed currency? This was all the rage among the goldbugs.
Look at this headlines from Business Insider:
Robert Kiyosaki is a successful author who really stuck "gold" with his Rich Dad Poor Dad series. Unfortunately, it turns out the guy is a first class clown.
Of course, he was not the only one. Even on Hive I had people telling me this currency was going to be announced at the BRICS summit.
What happened?
Did we get the currency? I will wait for someone to point out where it came into being.
There was no talk of a gold backed currency. Seems like this was more nonsense from the usual suspects.
That said, there was something that was said which has people like Kiyosaki once again claiming the death of the U.S. dollar.
Trade In Local Currencies
What was announced was the decision to increase trade in local currencies. This is a way to circumvent the USD and threaten it.
Or so we are told.
Here is what we find in Bloomberg:
Brazil, Russia, India and China pledged to study ways to use their currencies, instead of the U.S. dollar, in local trade at a heads-of-state summit of the four biggest emerging economies.
From this quote, it looks like this is some serious tactics being employed.
There is only one problem.
Here is the article the quote was taken from:
So this is an idea that was agreed to 13 years ago. Why should we believe this is the time considering it was the goal 13 years ago?
There is a reason why the BRICS were not able to significantly increase their trade volumes in local currencies. This is the point that gets overlooked.
More Then Trade
People like to focus upon trade. The reality is the BRICS, one the financial stage, are nothing. This is a statement that includes China.
When it comes to currencies, the BRICS are nothing. Central banks around the world have nothing in BRICS currencies as reserves, including the Yuan. FOREX Derivatives (FED) which hedges against exchange risk is 75% USD and more than 10% EUR. The BRICS do not even chart.
The reality is that if you want to be an international player, the currency best be international. There is only one international currency: the eurodollar.
That is right. It is not even the USD. This is where the entire conversation takes a turn from theory into reality. When looking at trade, everyone wants to focus upon the payments. Yet, the most important factor is the funding of global trade.
In this arena, the eurodollar, i.e. entries on the balance sheets of financial institutions, is king.
The infrastructure of the global financial system is built around this. As they say, if you want to get to the bottom of things, follow the money.
BRICS Becoming Irrelevant
The BRICS are becoming irrelevant as a coalition.
Two of the recent additions are Saudi Arabia and Iran. This is a guarantee to never have unanimous consensus. Iran and the Saudis agree on almost nothing.
Saudi Arabia is the wild card for one single reason: they want protection. The Saudis have no interest in becoming part of a growing coalition. Their problem is there is one country that provides their security and that is the United States. The challenge is the U.S. doesn't seem very interested in providing that much longer.
Hence, the Saudis are on the market for a daddy. Perhaps China will fill the role is the thinking. Nothing pertains to trade, currency, or supporting the coalition.
Do you see where this is already heading?
The BRICS thread to the USD is non-existent. Trade is their best option and even that is minimal. When we look at the structure of the financial system along with the different markets, BRICS, other than China, are not even on the radar.
This is just another example of why understanding how things work rather than believing in theory espoused by economists or ideologies, both of which are not part of the real world, is crucial. It quickly becomes evident how much of what people espouse is nonsense.
Kiyosaki is a best seller author but that does not preclude him from drinking the Kool-Aid.
He did, after all, state that bitcoin was "God's money".
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He later proposed the use of Bitcoin, and preached the gospel of cryptocurrency.
BRICS is pro - Russia 🇷🇺, and mother Russia is pro-crypto, anything that goes against or substitute for US Dollar 💵 is a good option for BRICS /🇷🇺 Russia
Yes, he did become a bitcoin maximalist which shows how off base he is.
Nobody is putting Brazil on the radar, but they forgot that the former president of Brazil will be president of the BRICS bank until July 2025.
What in my view is terrible, a former president who suffered impeachment, couldn't make a speech without saying something stupid, having an important position like this, and earning the salary that the position demands.
Some of this woman's famous quotes:
In 2015, she spoke about storing wind: “So far, hydropower is the cheapest, in terms of how long it lasts with maintenance and also because the water is free and we can store it. The wind could be that too, but you still haven't got technology to store wind. So, if the contribution of other countries, let's assume that it is to develop a technology that is capable of storing wind energy, having a way to store it, because the wind is different at different times of the day. So, let's assume it's windier at night, how would I go about storing it?”
Also in 2015, she saluted cassava, yes food: “No civilization was born without having access to a basic form of food, and here we have one, cassava. Today, I am saluting cassava, it is one of the greatest achievements of this country”
In 2013 on Children's Day: "Children's Day is the day of mothers, fathers and teachers, but it is also the day of animals. Whenever you look at a child, there is always a hidden figure, which is a dog behind, which is a very important thing."
This is the goof who is in such an important position.
Well the players matter little since they are always goofs, corrupt, and after power.
The faces change, the players are the same.
While some have overblown the recant BRICs developments, they remain significant.
The percentage of global trade in USD has been dropping for decades and has begun dropping at a faster rate recently.
At the end of the day the USD is finished because the US is finished - catestrophically defeated on the battlefield, its weapons exposed as expensive ineffective crap.
Trade is a small piece of the puzzle.
As for the military, the belief that the USD only has value because of the military is simply incorrect.
This belief stems from the petrodollar nonsense and the belief the USD only has value because oil is priced in it. Again, people do not understand the system and try to simply it to the point where they completely miss what is taking place.
Trade is not a small piece of the puzzle.
Trade is everything!
Money and the entire financial system only exist to facilitate trade.
Ultimately Bitcoin is the best currency for global trade (not for buying Pizza) but the USD has to be dethroned as global reserve currency first.
What is happening with BRICS is part of this.
It is far more economically efficient to trade in a common global currency. That is why the USD was adopted as global reserve currency in the first place.
But geopolitics trumps economics.
The USD and EURO are now being rejected for geopolitical reasons.
Equally, geopolitics can be resolved by trade and diplomacy or by military means.
But without a credible military diplomacy and trade become less effective because why buy what you can take.
The US, once the "arsenel of democracy", whose key military strength was unlimited ammunition, now stands helpless before massive Russian overmatch in the production of basic military items like artillery shells and tanks.
The US had de-industrialised itself by outsourcing and destroyed its key strategic military advantage.
Thanks for the feedback. This will make an excellent approach. You view is completely false and no in keeping with monetary history.
I will reply piece by piece in an article.
Your deep analysis of the BRICS situation sheds light on the complexities often overshadowed by sensationalism. It's crucial to discern between theories and actual developments. While some ideas gain traction, the reality can be quite different. The focus on trade in local currencies is intriguing, yet the broader context and financial infrastructure underscore the challenges faced by the BRICS coalition. Your nuanced perspective highlights the importance of understanding the intricacies of global finance and not getting swept away by theories or ideologies. Your thoughtful insights provide valuable clarity in a world of complex dynamics. 🌍💡 Thanks for sharing @taskmaster4450le 😊
Anyone in cryptocurrency can see how long it takes to build infrastructure. There are decades worth of networks that cater to the USD, processing trillions of dollars in transactions each day.
To believe that trade is the only game is overlooking the majority of what takes place.
You are absolutely right! that the cryptocurrency space is rapidly evolving, but it's also important to acknowledge the significant progress made in terms of infrastructure development. Just like traditional financial networks took time to establish, cryptocurrency networks are steadily growing to handle diverse transactions and use cases beyond just trading. The potential for innovation in this field is vast and holds promise beyond what meets the eye.
I'm totally lost, lol. I'm not much updated on these things but is a good thing you I get to know of them. I don't even know what BRICS is but I will do well to go find out what it is.
Thank you so much for sharing, at least I've heard of BRICS now, time to learn more.
Robert Kiyosaki said that bitcoin is "the peoples money". He says that gold and silver are "God's money".
Thank you. I stand correct.
Money is a man made creation and he makes it divine.
Bitcoin is Wall Street's money. Fixed money always pooled. Another point he is off base with.
In the early days I accepted the small blocker argument, but I see that it has been used to make bitcoin less acceptable as p2p unit of exchange with higher fees and RBF. The digital gold idea was taken too literally, so it can't be used for everyday things.
It's almost what establishment wanted. They can't censor it yet, but if Blackrock gets enough control of miners they can cause a major dent in fungibility as sanctioned UTXO's would have to wait much longer for confirmation as only non compliant miners would pick them up from the mempool.
Block size should have kept pace with bandwidth increases over the past decade, but it didn't and we have more centralization. Now projects like .bitmap are starting to force the issue of block size increases.
It kind of shows us how divided the world is at the moment right now however. It's nearly a 50/50 split. The only big issue is India which has a rather robust and very much so growing economy. Russia is crap besides the massive amount of raw resources it has in oil and gas accounting for about 25% of the worlds consumption at the moment and India and China want to gobble that up. Russia is now getting over $60 per barrel now on their oil exports. China is pretty much screwed so that won't be helping BRICs, Iran is a shit show and Saudi Arabia it legit makes no sense besides them so called being tired of the USA even though we saved their ass in the 90's.
Overall there's not much supporting BRICS besides oil. Control the resources control the world. It's also why we are seeing some rather tense times in Africa again. Once again resources. And Ukraine also resources. The north east that Russia has taken accounts for over half of the natural gas that the EU would use and a good amount of oil.
The world is always divided. This is why the ideas that the governments are going to do "fill in the blank" is absurd. Governments will not always agree.
It's interesting how economic theories and predictions don't always align with real-world outcomes. I agree with you, there are challenges and complexities involved.
The global financial system's infrastructure and the dominance of the dollar emphasize how interconnected and intricate these matters are. It's a long way to gain dominance over the Dollar.
It's a reminder that understanding practical mechanisms is crucial, and sometimes theories can fall short in the face of complex realities.
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Interesting, you cite the Eurodollar as the only international currency, yet the dollar is the global trade currency. These are two different words, and now I need to study why they are different. Any light you can shed would be appreciated.
It is actually the eurodollar that funds global trade. There are no banknotes being passed back and forth.
Eurodollars, today, like USD, are numbers on a screen. This is all ledger based money. That is why the accusation of cryptocurrency being fake are wrong. It is ledger based money also.