China's Masterplan to End the US Dollar Dominance Will Change The World Forever
China's Insane MASTERPLAN To End The US Dollar Dominance Will Change The Entire World Forever
Tech Futures: 11-17-2022
The BRICS countries are five of the fastest-growing economies in the world. And the BRICS economic structure, which includes Brazil, Russia, India, China, and South Africa, is also expanding.
The combined 3.23 billion residents of the BRICS countries account for 41% of the global populace. In addition, they take credit for 24% of the world's GDP. And together, these groups control 16 percent of the total value of international commerce.
Now, with that much power, the US and the dollar are in serious danger. Most recently, China and other members have attracted new countries to join the organization.
Now, in October, the Chinese Ministry of Foreign Affairs expressed support for BRICS membership expansion. And speculation had arisen that Saudi Arabia intended to join the bloc.
According to reports from South African media, Saudi Arabia's Crown Prince Mohammed bin Salman recently stated his country's interest in joining BRICS. Moreover, they said Saudi Arabia is not the only country interested in joining the organization.
As this year's BRICS chair, China is committed to seeing the organization through its current membership expansion process and into further "BRICS Plus" collaboration. And since its inception in 2017, the "BRICS Plus" collaboration has extended an invitation to heads of state from other developing nations. And they want them to participate in the ongoing conversation.
China made the point during the 14th BRICS Summit in June that the group is not an exclusive club. Rather it functions as a large family where members look out for one another. It's also a partnership in which everyone benefits from working together.
Now, it has been suggested that the BRICS countries create their own reserve currency to better advance their collective economic goals. It will be tied to a basket of currencies from the five member states.
The current system of using the dollar as the de facto standard for oil trading and pricing dates back to 1974. It was the chaotic period after the Arab Oil Embargo, the 1973 oil crisis, and the removal of the dollar's tie to gold in 1971.
Saudi Arabia agreed to price oil in US dollars and retain reserves partially in US Treasury bonds in exchange for US military and political support and purchases of its oil. Other oil-exporting countries soon followed suit. And the Saudis likewise maintained a tie to the dollar as their currency. The oil-producing states in the Persian Gulf grew wealthy as a result of these "petrodollar" agreements. And the United States was also able to readily fund its large trade deficits.
Now, this resulted in a strong currency, which made US goods comparatively costly and contributed to the outsourcing of manufacturing to China. Over the years, the oil industry has developed intricate systems for discovering prices and mitigating financial and physical risks. And this was done along the supply chains that bring crude oil from the ground up to consumers' homes.
Additionally, because of this market, many people believed the US dollar would continue to be the de facto global oil reserve currency for the foreseeable future. The markets were both "deep" and "liquid," with a wide variety of services that were difficult, if not impossible, to replicate.
However, tension and worry have steadily increased over time. It's due to the United States' growing dominance in the dollar's trade system. Now, some nations and economies have accused the United States of acting unilaterally to halt oil exports from countries whose policies Washington opposes. Just consider the countries of Iran and Venezuela.
It has been decided to find an alternative to SWIFT. And this includes establishing a system for international bank transfers in China. However, these measures are still in their infancy.
There was also a collaboration between Russia, China, and others to find alternatives to the US currency. And they attempted to aid Iran in circumventing US sanctions by developing a cumbersome SWIFT substitute of their own.
After then, an invasion of Ukraine ensued. Now, further restrictions were placed on Russian commerce due to punitive sanctions imposed by the United States and the European Union. They also put Russia's $300 billion in reserves on ice.
Moscow protested this as "stealing." Now, some Western critics expressed concern that a failure to safeguard foreign reserves may damage the dollar's standing as a reserve currency.