BRICS - 120 Countries Ready To Dedollarize

The number of countries present at the last BRICS forum held in Russia was impressive. A bad omen for the dollar.

The BRICS have the wind in their sails

Representatives from more than 120 foreign countries were present this week for the sixth BRICS International Municipal Forum. The event brought together about 5,000 participants from 500 cities.

The forum was an opportunity to consult on the economy, digital technologies, industry, energy, urban infrastructure, transport, ecology, healthcare, education, science, culture, sports, and tourism. The goal is to promote cooperation between megacities within the framework of the BRICS.

The head of the Department of External Economic and International Relations of Moscow Sergey Cheremin stated:

“This forum will allow us to strengthen relations not only between the capitals of the BRICS and Moscow but also between our partners from all continents. Today, more than 60 official delegations have come.”

It is a success for President Putin, who had encouraged representatives “from all countries wishing to cooperate with our organization” to participate.

Russia is therefore far from being isolated. On the contrary, the waiting list to join the BRICS is growing rapidly. Several major emerging countries have officially submitted their application for membership in the alliance.

The five founding members are Russia, China, Brazil, South Africa, and India. Five other countries joined them at the beginning of the year: Saudi Arabia, Iran, the United Arab Emirates, Egypt, and Ethiopia.

This expansion adds the weight of the main oil-exporting countries from the Middle East. It has strengthened relations with Iran and reconciled it with its Saudi neighbor.

Algeria, Vietnam, Indonesia, Turkey, Pakistan, Malaysia, Nigeria, Thailand, Venezuela, Kazakhstan, Cuba, Palestine, the Democratic Republic of Congo, Gabon, Bangladesh, the Kingdom of Bahrain, Belarus, Kuwait, Senegal, and Bolivia are also in line.

An anti-imperialist alliance

It is rumored that Russia will announce in October the creation of a group of “partner” countries. It will be a sort of antechamber to the BRICS club.

Each member country must provide a list of 10 countries from the 33 countries requesting to join the BRICS. The principle is that the 10 common countries can become partner countries.

This reinforcement will not be insignificant since the BRICS actively advocate for the reform of the United Nations Security Council and the abandonment of the imperial currency: the dollar.

Joining the BRICS means accepting currencies other than the dollar and connecting to new international payment systems. It is about “addressing what we consider an unjust and costly payment system”, said South Africa’s Minister of Foreign Affairs earlier this year.

According to Deputy Foreign Minister Sergey Ryabkov, an alternative to the Western SWIFT payment system could be unveiled at the next summit in Kazan.

Moreover, Russia will launch on September 1st a platform enabling large Russian companies to settle their exports and imports in Bitcoin. This good surprise parallels Donald Trump’s endorsement of Bitcoin.

Bitcoin is the absolute, stateless, and uncensorable store of value that the world needs to trade on equal terms. It appears to be the obvious currency of a world without monetary privilege. The American president seems to understand this.

Obtaining bitcoins today at a low price seems smarter than starting a third world war. It would still be a war for nothing. It’s too late; the BRICS are already too heavy.

BRICS > G7

The BRICS have major demographic and economic weight. They represent nearly half of the world’s population (46%), compared to a little less than 10% for the G7 (United States, Canada, Japan, United Kingdom, Germany, France, and Italy).

The global GDP share of the BRICS (ppp) is now 35%, compared to 30% for the G7. Knowing that the G7’s share was 42% twenty years ago.

Some projections suggest that the BRICS’s GDP share will be 50% by 2050, compared to 20% for the G7 countries.

According to the Bank of France, “the heterogeneity of the BRICS club and the low trade integration among them limit the group’s ability to influence global trade and the international monetary system.”

Behind this facade discourse, the West leaves no stone unturned to hamper the BRICS:

– Freezing of Russia’s foreign exchange reserves (300 billion euros), disconnection from the SWIFT network, and embargo.
– Prohibitive customs duties (100% on the import of Chinese electric vehicles to the United States, 38% in Europe)
– Embargo on machines used to manufacture semiconductors.
– Extraterritorial rights to sanction multinationals continuing to trade with embargoed countries like Iran or Russia.

So many imperial decrees that fragment the world, not to mention the war… We are heading towards a deglobalization that will be painfully inflationary.

On this topic, we explained in this article why inflation is not likely to ease soon. The following graph summarizes the core problem. Growth is constrained by the physical limits of the planet (oil), which, in the face of a monetary ponzi, can only generate inflation.

World crude oil + condensate output is -2.0 mmb/d less than late 2018 levels

All world oil production growth since 2010 has been because of tight oil#energy #OOTT #oilandgas #WTI #CrudeOil #fintwit #OPEC #Commodities #commoditiesmarket pic.twitter.com/WfhZIUv4bn

— Art Berman (@aeberman12) July 19, 2024

In a fragmented, indebted, potentially war-torn, and highly inflationary world, the store of value that is Bitcoin is doomed to insolent appreciation. To whom it may concern…