The big news this week is that Saudi Arabia is in talks with the BRICS countries regarding joining the new world currency.
The Financial Times reports:
The New Development Bank, the Shanghai-based lender better known as the “BRICS bank,” is in talks with Saudi Arabia on admitting the country as its ninth member, a move that would strengthen its funding options as founding shareholder Russia struggles under the impact of sanctions.
The addition of the Saudi kingdom would reinforce ties between the bank, which was established by the world’s biggest developing economies as an alternative to Western-led Bretton Woods institutions, and the world’s second-largest oil producer.
SWIFT Revenge
The non-U.S.-aligned countries are seeking an alternative after President Biden weaponized the dollar. But first, here's a little background.
On February 22, 2022, after Russia invaded Ukraine, the White House put out a memo.
In it, the Biden administration froze assets in the U.S. belonging to the largest Russian banks as well as assets belonging to the five top oligarch families, and declared targets for further sanctions.
Per the memo:
Today, the Secretary of the Treasury will determine that any institution in the financial services sector of the Russian Federation economy is a target for further sanctions.
The world economy runs on U.S. dollars and uses the SWIFT banking system to clear obligations.
After the White House put out this missive, in what can only be described as a massive blunder, every country on Earth not named the United States suddenly woke up and realized that most of its reserve currency was in danger of being frozen exactly when it needed it most. Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
These countries thought to themselves, If it could happen to Russia, it could happen to us, and we need to maintain the sovereignty of our currency. They are quickly putting together a backup plan, and it will lead to a more bifurcated world.
China Is All-In
China is the leader of the BRICS, with the world's second-largest economy. The Middle Kingdom just so happens to sell the technology and tools that will build a new currency, including a digital one that will enable undemocratic countries to control every penny spent everywhere and know who bought what and when.
Plus, under its Belt and Road Initiative, the Chinese government will lend you the money and set up the contractors for you to enable this new, all-seeing eye. As an added benefit to the BRICS system, you will be able to avoid U.S. sanctions and trade with other members while exercising cheap and effective control over your political enemies. You may also destroy the free market and boost your revenue through taxes on the formerly gray markets.
It's a dictator's dream. You get all of the benefits of the Stasi with none of the labor costs.
There will be winners and losers as these new systems spread, and some of them will show up in the West. Learn more about it here.
All the best,
Christian DeHaemer Christian is the founder of Bull and Bust Report and an editor at Energy and Capital. For more on Christian, see his editor’s page.
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