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It will be a LONG time coming.

person holding lighted dollar bills — Photo by Jp Valery on Unsplash

One article highlighted below brings out a point that I made two years ago when everyone in the alternative press was writing (as many still are) about how the BRICS nations were determined to replace the US dollar as a global currency:

In early June, a rumour began to circulate — which was widely reported in the Indian press as true — that the government of Saudi Arabia had allowed its petro-dollar agreement with the United States to lapse.

This non-exclusive arrangement between the two countries never required the Saudis to limit their oil sales to dollars or to recycle their oil profits exclusively in U.S. Treasury securities (of which it holds a considerable $135.9 billion) and Western banks.

Indeed, the Saudis are free to sell oil in multiple currencies, such as the Euro, and participate in digital currency platforms such as mBridge, a trial initiative of the Bank of International Settlements and the central banks of China, Thailand, and the United Arab Emirates (UAE).

Nonetheless, the rumour that this decades-long petrodollar agreement had come to an end reflects the widespread expectation that a seismic shift in the financial system will overturn the rule of the Dollar-Wall Street regime. It was a false rumour, but it carried within it a truth about the possibilities of a post-dollar or de-dollarised world.

While I would disagree with the downtrend destination for the dollar in the last line, the rest confirms what I’ve said in the past two years about the dollar not being replaced with a BRICS currency (or any other currency) anytime soon, though many of my own readers may wish it would be. Collapse of the dollar is not imminent, though the collapse of anything is eventually inevitable.

…click on the above link to read the rest of the article…

De-Dollarization Just Accelerated… And You Might Not Even Know About It

June 13, 2024

De-Dollarization Just Accelerated… And You Might Not Even Know About It

BRICS in Nizhny Novgorod, Crickets’ Silence, Saudi Arabia, and Bridges (Away from the U.S. Dollar)

This past week has been a real turning point in the de-dollarization trend we’ve been talking about in these pages.

Funny enough, the media seems to be completely oblivious to most of it. Perhaps intentionally so.

As I told you earlier this week, the 50-year petrodollar agreement between Saudi Arabia and the United States is no more, with no new deal in place.

But, we mostly heard crickets from the Western mainstream media…

And just as I was writing about that, something else closely related was happening in Russia. This is from TASS, the Russian News Agency…

NIZHNY NOVGOROD, June 10. /TASS/. Delegates from 22 countries are expected to take part in the meeting of the BRICS foreign ministers in Nizhny Novgorod, the organizers told journalists.

According to the organizers, representatives from Russia, Brazil, China, Egypt, Ethiopia, India, Iran, South Africa, and the United Arab Emirates (UAE) are taking part in sessions on Monday and representatives from Bangladesh, Bahrain, Belarus, Cuba, Kazakhstan, Laos, Mauritania, Saudi Arabia, Sri Lanka, Thailand, Turkey, Venezuela, and Vietnam are expected to attend events on Tuesday, June 11.

The majority of the participating countries are represented by ministers.

Meanwhile, once again, awkward silence from the Western media. Here’s a screenshot I’ve taken of my Google results to illustrate. Not even one of these reports came from the West…

This is suspiciously odd given that….

BRICS collectively hold 32% of the world’s GDP, surpassing the 30% held by the G7 countries.
BRICS represent nearly half of the world’s population.
BRICS nations produce about 42% of global crude oil output.

Needless to say, it’s fair to say that BRICS isn’t just any bunch of countries. This makes it doubly weird how the mainstream media chose to ignore this.

…click on the above link to read the rest of the article…

Will BRICS launch a new world in 2024?

March 18, 2024

Will BRICS launch a new world in 2024?

BRICS doubled its membership at the start of 2024, and faces huge tasks ahead: integrating its newest members, developing future admission criteria, deepening the institution’s groundings, and most importantly, launching the mechanisms for bypassing the US dollar in international finance.

(Photo Credit: The Cradle)

MOSCOW – Across the Global South, countries are lining up to join the multipolar BRICS and the Hegemon-free future it promises. The onslaught of interest has become an unavoidable theme of discussion during this crucial year of the Russian presidency of what, for the moment, is BRICS-10.

Indonesia and Nigeria are among the top tiers of candidates likely to join. The same applies to Pakistan and Vietnam. Mexico is in a very complex bind: how to join without summoning the ire of the Hegemon.

And then there’s the new candidacy on a roll: Yemen, which enjoys plenty of support from Russia, China, and Iran.

It’s been up to Russia’s top BRICS sherpa, the immensely capable Deputy Foreign Minister Sergey Ryabkov, to clarify what’s ahead. He tells TASS:

We must provide a platform for the countries interested in rapprochement with the BRICS, where they will be able to work practically without feeling left behind and joining this cooperation rhythm. And as to how the further expansion will be decided upon – this should be postponed at least until the leaders convene in Kazan to decide.

The key decision on BRICS+ expansion will only come out of the Kazan summit next October. Ryabkov stresses that the order of the day is first “to integrate those who have just joined.” This means that “as a ‘ten,’ we work at least as efficiently, or, rather, more efficiently than we did within the initial ‘five.'”

…click on the above link to read the rest of the article…

Hedging the End of Fiat

August 28, 2023

Hedging the End of Fiat

It is slowly coming clear that the fiat dollar’s hegemony is drawing to a close. That’s what the BRICS summit in Johannesburg is all about — rats, if you like, deserting the dollar’s ship. With the dollar’s backing being no more than a precarious faith in it, it is bound to be sold down by foreign holders. Being only fiat, it could even become valueless, threatening to take down the other western alliance fiat currencies as well.

How do you protect your paper wealth from this outcome? Some swear by bitcoin and others by gold.

This article looks at what is likely to emerge as a replacement currency system, and concludes that from practical and legal aspects, bitcoin and the entire cryptocurrency industry will fail with fiat, while mankind will return to gold, as it has always done in the past when state control over currency fails

Introduction

It is gradually dawning on market participants that the era of fiat currencies is drawing to a close. Monetarists, who first warned us of the inflationary consequences of the expansion of money and credit were also the first to warn us that the slowdown in monetary expansion would lead to recession, and since then we have seen broad money statistics flatline, with bank lending beginning to contract. This is interpreted by macroeconomists as the end of inflation, and the return to lower interest rates to stave off recession.

Unfortunately, this black-and-white interpretation of either inflation or recession but never both has been challenged by bond yields around the world which are rising to new highs. And the charts tell us that they are likely to go considerably higher. Consequently, conviction that inflation of producer and consumer prices will prove to be a temporary phenomenon is infected with doubt.

…click on the above link to read the rest…

Xi, Putin Hail First BRICS Expansion In Over A Decade As Gulf Oil Powers Join

August 24, 2023

Xi, Putin Hail First BRICS Expansion In Over A Decade As Gulf Oil Powers Join

At a moment China and Russia have envisioned the future of BRICS as fundamentally an anti-Western bloc of developing nations, the Gulf oil powers Saudi Arabia and the United Arab Emirates have been formally invited to become members, which marks the bloc’s first expansion in over a decade.

“The membership will take effect from the first of January, 2024,” South African President Cyril Ramaphosa said, adding that additionally Argentina, Egypt, Ethiopia and Iran will be added to the fold next year.

China’s President Xi Jinping hailed the rare expansion, beyond the current large economies of China, Russia, Brazil India, China and South Africa as “historic”. He said it will “inject new impetus into the BRICS cooperation mechanism and further strengthen the power of world peace and development.”

President Putin too congratulated the soon to be newest members, saying in a video message, “I would like to congratulate the new members who will work in a full-scale format next year.”

“And I would like to assure all our colleagues that we will continue the work that we started today on expanding the influence of BRICS in the world,” the Russian leader added. Indian Prime Minister Narendra Modi also hailed the expansion which he said will strengthen the bloc.

Saudi Foreign Minister Prince Faisal bin Farhan’s statement said, “the special, strategic relations with the BRICS nations promotes common principles, most importantly the firm belief in the principle of respect for sovereignty, independence and non-interference in internal affairs.”

He vowed in words before the BRICS conference on Thursday that the kingdom will be a “secure and reliable energy provider,” and noted that total bilateral trade between Riyadh and BRICS countries exceeded $160 billion in 2022, the Saudi foreign minister said.

…click on the above link to read the rest…

What Are the BRICS Planning With the August 22nd Durban Accords?

August 14, 2023

What Are the BRICS Planning With the August 22nd Durban Accords?

What are BRICS planning with the Durban Accords?

Photo by Khashayar Kouchpeydeh

In my first explainer about the BRICS nations, you met the players and you know why their decisions affect the global economy. But why do their decisions affect us?

You need to understand that first – before the August 22nd Durban Accords will make any sense. (But once you do understand, you’ll be astonished…)

Professor Reagan’s class is now in session!

Global trade runs on U.S. dollars

Since World War II, the U.S. dollar has enjoyed the role of global reserve currency. You may have heard those words before – here’s what they mean…

Worldwide, when companies or nations transacting with one another don’t share a common currency, they use U.S. dollars. When a Chilean copper mine sells tons of raw ore to a Canadian refiner, they invoice (and get paid) in U.S. dollars.

Obviously, most nations don’t have a common currency (the exception is the Euro zone). So the use of dollars for international trade is simply huge, approximately 85% of the global total.

So the world relies on dollars to do business. That’s a great deal for us! That means, for example, that deficit spending and newly-printed money always have a home somewhere in the world. Simply because the world has to have dollars.

Like I said, that’s a great deal for the nation that exports dollars. It’s not such a great deal for everyone else…

“It’s our currency, but it’s your problem”

In 1971, President Nixon ended the convertibility of dollars to gold.

The rest of the world, to put it mildly, went nuts. The gold standard was supposed to prevent inflation – but it hadn’t (primarily because American citizens weren’t allowed to swap dollars for gold since 1933).

…click on the above link to read the rest…

Why the dollar is finished

July 23, 2023

Why the dollar is finished

Last week in my Goldmoney Insight, I analysed the rationale for a new gold backed trade settlement currency on the agenda of the BRICS summit in Johannesburg on 22—24 August. This article is about the consequences for the dollar-based fiat currency regime.

There is strong evidence that planning for this new trade settlement currency has been in the works for some time and has been properly considered. That being so, we are witnessing the initial step away from fiat to gold backed currencies. Without the burden of expensive welfare commitments, all the attendees in Johannesburg can back or tie their currency values to gold with less difficulty than our welfare-dependent nations. And it is now in their commercial interests to do so.

We have been brainwashed with Keynesian misconceptions and the state theory of money for so long that our statist establishments and market participants fail to see the logic of sound money, and the threat it presents to our own currencies and economies. But there is a precedent for this foolishness from John Law, the proto-Keynesian who bankrupted France in 1720. I explain the similarities. That experience, and why it led to the destruction of Law’s livre currency illustrates our own dilemma and its likely outcome.

It’s not just a comparison between fiat currency and gold. America’s financial position is dire, more so than is generally realised. The euro is additionally threatened with extinction because of flaws in the euro system, and the UK is already in a deeper credit crisis than most commentators understand.

Introduction

On 7 July, news leaked out and was then confirmed by Russian state media that the BRICS meeting in Johannesburg would have a proposal on the agenda for a new gold-backed currency to be used exclusively for trade settlement and commodity pricing…

…click on the above link to read the rest…

The bell tolls for fiat

July 16, 2023

The bell tolls for fiat

The importance of Russia’s announcement that a new gold-backed trade currency is on the BRICS meeting agenda for August 22—24 in Johannesburg seems to have gone completely over everyone’s heads, with mainstream media not even reporting it.

This is a mistake. China and Russia know that if they are to succeed in removing the dollar from their sphere of influence, they have to come up with a better alternative. They also know they have to consolidate their trade partners into a formidable bloc, so plans are afoot to consolidate BRICS, the Shanghai Cooperation Organisation, and the Eurasian Economic Union along with those nations who wish to join in. It will be a super-group embracing most of Asia (including the Middle East), Africa, and Latin America.

The groundwork for the new currency has been laid by Sergei Glazyev and is considerably more advanced than generally realised.

This article explains why Russia and China are now prepared to fully back Glazyev’s expanded project. For Russia, it is also now imperative to destabilise the dollar as a deliberate escalation of the financial war against America and NATO. China’s priority is no longer to protect her export trade, but to ensure that her African and Latin American suppliers are not destabilised by higher dollar interest rates.

Introduction

“The BRICS’s introduction of a gold-backed currency, which is supported by 41 countries with large and influential economies, will weaken the dollar and the euro and will benefit countries such as Iran, while Iranians in possession of gold will experience a wealth increase,” Mousavi added [the head of the South Asia Department at Iran’s Foreign Ministry]. The Russian government confirmed a day earlier that Brazil, Russia, India, China, and South Africa would introduce a new trading currency backed by gold.

…click on the above link to read the rest…

BRICS Nations Developing “New Currency” as Quest for Global De-Dollarization Accelerates

April 6, 2023

BRICS Nations Developing “New Currency” as Quest for Global De-Dollarization Accelerates

China and Brazil recently finalized a trade deal in their own currencies completely bypassing the dollar, but that’s not the only bad news for the world’s reserve currency.

Last week, a Russian official announced that the BRICS nations are working to develop a “new currency,” yet another sign that dollar dominance is waning.

State Duma (the Russian legislative assembly) deputy chairman Alexander Babakov said the transition to settlements in national currencies is the first step. We’ve already seen this occur with recent oil deals between India and Russia being settled in currencies other than dollars.

The next one is to provide the circulation of digital or any other form of a fundamentally new currency in the nearest future. I think that at the BRICS [leaders’ summit], the readiness to realize this project will be announced, such works are underway.”

That summit is scheduled for August.

Babakov said the BRICS nations are developing a strategy that “does not defend the dollar or euro” and that “a single currency” would likely emerge within BRICS, pegged to gold or “other groups of products, rare-earth elements, or soil.”

Brazil, Russia, India, China, and South Africa make up the BRICS block. It accounts for about 40% of the global population and a quarter of the global GDP.

Last year, Iran officially applied to join BRICS, and according to a report by The Cradle, several nations have expressed interest in joining the bloc, including Saudi Arabia, Algeria, UAE, Egypt, Argentina, Mexico, and Nigeria.

Former Goldman Sachs chief economist Jim O’Neill coined the BRIC acronym. In a recent paper published by Global Policy Journal, he urged the expansion of BRICS.

“The US dollar plays a far too dominant role in global finance,” he wrote. “Whenever the Federal Reserve Board has embarked on periods of monetary tightening, or the opposite, loosening, the consequences on the value of the dollar and the knock-on effects have been dramatic.”

…click on the above link to read the rest…

Iran-Saudi Rapprochement Will Deal A Deathblow To The Dollar

March 18, 2023

Iran-Saudi Rapprochement Will Deal A Deathblow To The Dollar

Jacob Lawrence Struggle: From the History of the American People, Panel 8 1954Eurasia’s geo-economic integration took a great leap forward as a result of the Iranian–Saudi rapprochement, which unlocks the Gulf Cooperation Council’s (GCC) trade potential with Russia and China. Its wealthy members can now tap into two series of Iranian-transiting megaprojects in one fell swoop through this deal, with the North-South Transport Corridor (NSTC) connecting them to Russia while the China-Central Asia-West Asia Economic Corridor (CCAWAEC) will do the same vis-à-vis China.

The bloc’s de facto Saudi leader has been prioritizing a comprehensive economic reform policy known as “Vision 2030” that was introduced by Crown Prince and first-ever Prime Minister Mohammed Bin Salman (MBS) upon his rise to power in 2015. It regrettably stumbled as a result of the disastrous Yemeni War that he’s been waging since that same year, but everything is now back on track and more promising than ever after securing $50 billion worth of investments from China last December.

The People’s Republic regards Vision 2030 as complementary to its Belt & Road Initiative (BRI) due to MBS’ focus on real-sector investments for preemptively diversifying the Saudi economy away from its presently disproportionate dependence on oil exports. His country’s location at the crossroads of Afro-Eurasia also makes investments there extremely attractive from the perspective of China’s logistical interests, hence its massive commitment to his comprehensive economic reform policy.

Without last week’s Beijing-brokered deal, China would have had to rely on maritime routes under the control of the powerful US Navy to facilitate the forthcoming explosion in bilateral real-sector trade, but now everything can be conducted much more securely via the Iranian-transiting CCAWAEC. Looking forward, there’s also a theoretical possibility of Chinese energy investments in Iran connecting the Gulf to Central Asia and thenceforth to the People’s Republic, thus fully securing its strategic interests.

…click on the above link to read the rest…

Russia And China Officially Announce A “New Global Reserve Currency”

July 24, 2022

Russia And China Officially Announce A “New Global Reserve Currency”

And once again, as happens often with consequential news in the United States and the West, no one has noticed and no one seems to care.

If you’ve blinked over the last month, you may have missed it…

China and Russia are taking their shot at the U.S. dollar. And as often happens with consequential news in the United States and the West, no one seems to notice or even care.

Since the beginning of the year, I have been writing about the possibility of Russia and China challenging the US dollar’s global reserve status. Now, it’s happening.

It shouldn’t be any surprise to those paying attention that Russia and China are strengthening their economic ties amidst continued Western sanctions on Russia as a result of the country’s war in Ukraine.

What may surprise some people, however, is that Russia and the BRICS countries, including Brazil, Russia, India, China, and South Africa, are officially working on their own “new global reserve currency,” RT reported in late June. Nobody even seemed to notice.

“The issue of creating an international reserve currency based on a basket of currencies of our countries is being worked out,” Vladimir Putin said at the BRICS business forum last month.

And of course, as Russia has been cut off from the SWIFT system, it is also pairing with China and the BRIC nations to develop “reliable alternative mechanisms for international payments” in order to “cut reliance on the Western financial system.”

In the meantime, Russia is also taking other steps to strengthen the alliance between BRIC nations, including re-routing trade to China and India, according to CNN:

President Vladimir Putin said Wednesday that Russia is rerouting trade to “reliable international partners” such as Brazil, India, China and South Africa as the West attempts to sever economic ties.

…click on the above link to read the rest of the article…

BRICS Nations Discuss Shared Crypto to Break Away From USD and SWIFT

November 27, 2019

BRICS Nations Discuss Shared Crypto to Break Away From USD and SWIFT

ANALYSIS

Brazil, Russia, India, China and South Africa, or the BRICS economic bloc, are engaging in discussions to issue cross-national digital money in order to reduce the dependence of their economies on the United States, as reported by Cointelegraph on Nov. 14. What will the new cryptocurrency look like, how does the BRICS group plan to use it and are there any existing projects underway that seek to achieve a similar goal of independence on such a high level?

BRICS and its problems

BRICS is the largest geopolitical block of countries, spanning three continents and wielding substantial economic power in global affairs. As of 2018, the five nations of the BRICS block had a combined nominal gross domestic product of $40 trillion, or about 23.2% of the gross world product.

However, such economic power does not come without competitive penchants from other nations that are vying for the markets that BRICS nations cater to. The greatest competition comes from the European Union and the U.S.

The political experience of recent years has shown that BRICS countries’ diplomacy has arguably failed in alleviating international sanctions, especially in politically sensitive markets such as the arms and the energy carriers markets. However, advances in technology are here to help out where politics cannot, as blockchain and digital assets have the potential to open entirely new horizons for finance.

The idea of a single cryptocurrency as a means of payments and value transmission is not a new one, but it is one that is being actively purported not only in countries like Venezuela with its Petro, but also among BRICS countries. The advantages of a single cryptocurrency as a universal means of settlements among BRICS nations would solve many of the problems they face on the global economic market.

…click on the above link to read the rest of the article…

BRICS was created as a tool of attack: Lula

September 1, 2019

BRICS was created as a tool of attack: Lula

Former Brazilian leader wishes emerging economies were closer, recalls Obama ‘crashing’ Copenhagen climate meet

In a wide-ranging, two-hour-plus, exclusive interview from a prison room in Curitiba in southern Brazil, former Brazilian president Luis Inacio Lula da Silva re-emerged for the first time, after more than 500 days in jail, and sent a clear message to the world.

Amid the 24/7 media frenzy of scripted sound bites and “fake news”, it’s virtually impossible to find a present or former head of state anywhere, in a conversation with journalists, willing to speak deep from his soul, to comment on all current political developments and relish telling stories about the corridors of power. And all that while still in prison.

The first part of this mini-series focused on the Amazon. Here, we will focus on Brazil’s relationship with BRICS and Beijing. BRICS is the grouping of major emerging economies – Brazil, Russia, India and China – that formed in 2006 and then included South Africa in their annual meetings from 2010.

My first question to Lula was about BRICS and the current geopolitical chessboard, with the US facing a Russia-China strategic partnership. As president, from 2003 to 2010, Lula was instrumental in formatting and expanding the influence of BRICS – in sharp contrast with Brazil’s current President, Jair Bolsonaro, who appears to be convinced that China is a threat.

Lula stressed that Brazil should have been getting closer to China in a mirror process of what occurred between Russia and China: “When there was a BRICS summit here in Ceará state in Brazil, I told comrade Dilma [Rousseff, the former president] that we should organize a pact like the Russia-China pact.

…click on the above link to read the rest of the article…

Is Germany Moving SWIFT-ly To CIPS?

August 23, 2018

Is Germany Moving SWIFT-ly To CIPS?

We have detailed how Russia and China have developed independent global payment systems that run parallel to the dollar based SWIFT system. We recently discussed how sanctions against Russia were actually “crushing the American empire“. The dollar based system is now obsolete and the entire world is questioning why the current system is the only way to conduct global trade. Well, it’s not.

The Federal Reserve Note (FRN), U.S. dollar is under attack in a variety of ways. We have been documenting the astronomical growth of the yuan backed futures oil contract and how this is going to impact the FRN and the American economy. We have also pointed out that Russia has dumped approximately 82% of their entire U.S. treasuries and Turkey recently announced they will be offloading approximately 50% of their treasury holdings.

At the most recent BRICS Summit, held in July, one of biggest take-aways was the fact the BRICS alliance was in talks with Turkey and the possibility of Turkey, which is a NATO “partner”, could join BRICS! This is to say nothing of China, which heads the BRICS alliance, is also in talks with Argentina and Venezuela.

Now we learn that Germany is on board with moving away from SWIFT and the “trade wars”, sanctions against Russia and President Trump forcing NATO “partners” to pay up. President Trump’s actions have pushed Germany away from their alliance with the U.S.. The German / Russian partnership is very important to the overall German economy and Trump’s recent demand that Germany stop doing oil business with Russia seems to have pushed them over the edge. There may be more at play here, but most all geopolitical issues in the 21st century boil down to oil, oil production and how to get the cheapest oil possible.

…click on the above link to read the rest of the article…

Russia and China Lay Economic Foundation Based on Golden Rule

December 28, 2017

Russia and China Lay Economic Foundation Based on Golden Rule

One of the many themes we support at The Daily Coin is the constant progress happening across the emerging markets, especially the nations involved the Eastern economic alliances like BRICS, BRI, SCO, EAEU and the like. These nations under the direction of China or Russia or a combination are laying the groundwork to be the driving force of the 21st Century and beyond.

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