Eurasia note #82: BRICS Dials It Up To 11

No quick fixes but will the U.S. one day ask to join?

Aug 28, 2023

New members bring Middle East and Africa into focus
Growing influence within oil cartels
BRICS seeks to dethrone Western Trojan horse, the IMF and World Bank
Gold bugs disappointed by lack of new currency
West disparages BRICS as ‘failed states’
Political import is long term and nuanced

(About 2,200 words or 11 minutes of your time.)

Tbilisi, Aug 28, 2023

The BRICS grouping of emerging economies has invited six new nations to join the founders Brazil, Russia, India, China, and South Africa.

The 15^th BRICs summit (Aug 22-24) in Johannesburg wrapped up last week with South African President Cyril Ramaphosa extending a hand to Argentina, Ethiopia, Egypt, Iran, Saudi Arabia and the UAE, which may become full members of BRICS from the start of next year.

Western state corporate media is quick to disparage the BRICS:

London Telegraph mocked it as a “motley crew of failing states.”
France24: How the BRICS nations failed to rebuild the global financial order.
Fortune: Economist: BRICS common currency is a ‘ridiculous’ idea.
Al Jazeera: Can BRICS dethrone the US dollar? It’ll be an uphill climb, experts say.
Washington Post: BRICS Raging Against the Dollar Is an Exercise in Futility

The term was coined by Goldman Sachs economist Jim O’Neil in 2001 to drum up investment business in the fast growing emerging markets.

Yet those countries’ governments were quick to appropriate the term, and turn it into a platform for exploring mutual economic and security interests.

It was a cute reversal of the globalist strategy of hijacking the language of grass roots protest, turning renewable energy into an attack on the power grid, or sustainable development into a mechanism to centralise bureaucratic control.

BRICS history

Russia made the early running, having launched its Eurasian Customs Union with Kazakhstan and Belarus in 2000 which has grown into the Eurasian Economic Union. Although Russia’s attempt to build a Eurasian Customs Union has progressed slowly, Armenia and Kyrgyzstan have joined.

Nowadays China dominates BRICS, partly due to the scale of its Belt and Road Initiative. China is literally “building out” its influence, offering countries to become regional hubs and building logistics infrastructure in return for their participation in security and anti-terror initiatives.

See “Eurasia Note #10 - Belt And Brace: War jaw is a distraction from reshaping politics and trade” (Moneycircus, Dec 19, 2021)

Progress on economic integration has been incremental. Brazil has been cautious about opening BRICS to new members, and too ambitious an expansion could be dangerous to its long-term survival. But trade between BRICS countries surged 56 percent between 2017 and 2022, to $422 billion.

If BRICS were all talk and no action, the West would hardly react:

it outnumbers that other talking shop, the G7, or Group of 7 leading industrialised nations.
it could coordinate policy within the G20 through Saudi Arabia and Argentina.
it includes two key OPEC oil exporters, along with Russia.
invitees include four Middle East countries — Saudi Arabia, the UAE, Egypt, and Iran.
Egypt controls the Suez Canal and has recently-discovered gas fields.
Iran is an oil and gas giant

The Atlantic Council said Iran’s membership would strengthened the anti-US axis in the BRICS—probably making it more challenging for the U.S. and the West with which to deal. The U.S. must take a posture of deterrence, preparing for a two-front war and nuclear attacks in East Asia. NATO has expanded in to Japan, making a trilateral agreement with the U.S. and South Korea could dramatically increase regional tensions.

The talking point for many observers is the challenge to the US dollar as the world’s reserve currency.

The BRICS agreed to amplify the use of their local currencies to in trade and investment.

Cutting dependence on the dollar is one half of the strategy; the other is reducing the influence of Western institutions and the leverage of the U.S..

They created the New Development Bank in 2015, headed by former Brazilian president Dilma Rousseff, to help finance infrastructure projects without the strings attached by the International Monetary Fund and the World Bank.

American enemies

This move towards financial neutrality, if not independence, worries Washington so much that, when the BRICS summit opened, the Biden administration announced it would funnel more money into the IMF — the U.S. offering $50 billion in lending for middle income and poor countries.

The IMF has followed the same shtick for decades: lend more money in return for austerity and the sale of public assets (to globalist institutions close to the IMF) and pin the debt on the public. It is a form of wealth distribution to the richest – or colonialism.

While it appears to sit at the top of the United Nations pile, the IMF is below the Bank for International Settlements in the pecking order. In 2018 BIS general manager Agustín Carstens told the IMF it if didn’t have enough money to handle multiple emerging market crises, “others will have to do it.”

The IMF presumes to control the world’s monetary system but it acts as an “enforcer” for the BIS, founded in 1930 by the Bank of England when it was still in private hands, along with the Reichsbank and private U.S. interests. The World Bank, a development bank, is the UN tool to shape domestic policy within countries.

See “From Argentina To A Street Near You -- A crisis born of elite conceit is about to be exported around the world” (Moneycircus, Aug16, 2022)

Last year Malaysian prime minister Anwar Ibrahim revived a proposal for an Asian Monetary Fund, to secure the region’s independence from the U.S. currency. He first proposed it after the financial crisis of the 1990s described in Dr Richard Werner’s Princes Of The Yen (2003). The PM said China was ready to discuss the matter.

Masahiro Matsumura, professor at Momoyama Gakuin University, told TASS that U.S. financial hegemony “is clearly at a crossroad” and that Europe and Japan “are silently observing.”

Countering colonialism

Africa is in the headlines, with France and the U.S. hinting at reversing the change of government in Niger, one of the top-three suppliers of uranium to the French nuclear industry. [1]

Only 14 percent of African exports go to other African states – evidence that the West’s extraction of resources from the continent has not changed despite nominal independence. [2]

BRICS proposes to boost trade within Africa by using domestic currencies rather than the U.S. dollar.

If there is an Achilles' heel it is tensions between China and its regional neighbours: it is curious that Indonesia is not among the new intake. It is among more than 40 countries that had expressed interest in joining BRICS, before the summit. There is still time. Already the members account for more than 40 per cent of the world population and a quarter of the global economy.

The question on the lips of geopolitical analysts is does this represent a true push for multipolarity, or is BRICS just a feint by the globalists that will lead to a universal world order. That depends on what you mean by a one world system, if it exists at all.

Much of the alt media is schizophrenic on this issue: it scoffs at the idea of a hidden cabal running the world, yet it insists that Putin and Xi are secretly in league with the U.S. and the Biden adminsitration (which some call Obama’s third term).

Criminal cabal

The narrative that Russia and China are just the globalists’ eastern lodge breaks down on the point of money. Rousseff said the New Development Bank represents the Global South’s rejection of the onerous terms of austerity that accompany any loan from the IMF.

Most alt media is stuck in this paradox because it fails to grasp the nature of the change taking place.

On one topic we can agree with Klaus Schwab, CEO of the World Economic Forum and partner of the United Nations to accelerate the implementation of Agenda 2030: this is a crisis of force majeure. No, it is not a glorious opportunity for a Great Reset but it is a desperate situation, brought about in no small part by the very globalists who now present themselves as saviours.

The 2022 balance sheet shows the U.S. government has $5 trillion in assets of which 40 per cent is student debt. On the other hand, when you include unfunded liabilities such as Social Security and Medicare, U.S. debt stands at upwards of $130 trillion. [3]

Whodunnit?

The West outsourced industry and jobs to Asia, resulting in them no longer being able to fund pensions, health and welfare, and resorting to the inflationary printing of money to cover the gap. The BRICS would not be where they are without the West committing hara-kiri, industrially, fiscally and monetarily.

Who are the architects of implosion? Why is the privately-owned Federal Reserve central bank aiding and abetting the collapse of the U.S. regional banks, which account for 70 per cent of lending to small business?

Who decided it was a good idea to turn money from a neutral method of transaction into a weapon, banning Russia from the SWIFT network through which banks settle transfers, and stealing $600 billion of Russia’s foreign exchange — a clear sign to the rest of the world that you cannot trust the U.S. and the European Union with your money?

Andy Schectman of precious metals brokers Miles Franklin says the U.S. has inadvertently set the stage for the rise of gold-backed currencies to challenge the U.S. dollar.

For decades the U.S. has suppressed gold prices to make Treasuries more attractive, and thus keep interest rates lower. It is predicated, he says, on an illusion: who wants gold when you can have the U.S. dollar. The West did not expect that Saudi Arabia, China and Russia would accumulate gold on the scale that has taken place – and it is going to underpin the new system. [4]

Gold backed?

The question for investors around the world is whether the BRICS will issue a new currency, or whether that of Russia will be gold backed.

Central banks have been buying gold over the past decade and a half, as if they know something we don’t. Sadly for investors it may not be a new Krugerrand. It seems that it may be an interbank currency, or token, that underpins the national currencies, or central bank digital currencies.

The West’s response is also central bank digital currency. Kristallina Giorgieva, director of the IMF, said two things: the ability of people to move money at the click of a mouse needs to be regulated; and that CBDCs need to be backed by something (gold?).

A measured comment from the Official Monetary and Financial Institutions Forum: Herbert Poenisch, Senior Fellow, Zhejiang University, and former Senior Economist, Bank for International Settlements, wrote in June that about the problem of moving from bilateral to multilateral clearing of a common currency.

Poenisch says the European Payments Union (EPU) functioned because the U.S. Treasury, ie the Federal Reserve, acted as backstop to any liquidity shortages. [5]

He did not add, but I will, that Europe’s major economy, Germany, was U.S.-occupied territory. The euro was made to happen, regardless of its economic consequences.

The construction of the euro took almost 50 years, and its problems include the lack of a common treasury, failure to account for variations in the cost of labour and availability of resources, and thus a universal interest rate having a very different impact at the local level – resulting in poorer countries taking on debt, and consequent inflation.

China’s burden

China dominates trade within the BRICS, which do less trade among each other. Thus China would bear the burden of keeping the clearing system afloat. It would need an EPU to supply funds to countries that run trade deficits, who import more than they export, like India and South Africa.

“All this would boost the internationalisation of the remnimbi and increase the pressure on China to liberalise its financial account. Both have major ramifications for the country’s domestic monetary policy. China is already coming to terms with the fallout from using its currency swap agreements to prop up countries in payments difficulties. So far, China is a long way from the benign neglect which the US adopted to help the Europeans establish their own multilateral clearing system and currency,” writes Poenisch.

In conclusion: There is an inescapable monetary crisis. The globalists already have their solution. They are simply misrepresenting the underlying cause or pretext.

The UN's talk of climate crisis, the WEF and its transformation wheels and Yuval Harari's sermons about useless people, and The Cloud replacing God... That is distraction.

For all the blather at conferences of the “elite,” the Great Reset comes down to a monetary crisis: the owner-investors who control the central banks have no need for 90 per cent of the population; medical, welfare and pension systems are insolvent — and if running those systems are the main activity of government, then government is no longer viable nor necessary; better to issue money directly, and hand off the remaining functions of government to the corporate sector. The military is largely privatised already.

This is the Great Shutdown. Read the next Moneycircus.

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