Saudi Arabia has said enough they want To join brics the economic Powerhouse That could challenge the West now if This is true the US Dollars doomed and The end is coming the Crown Prince of Saudi Arabia MBS spoke with ramaphosa The president of South Africa and Expressed the desire to join the brics Block according to him the Crown Prince Did Express Saudi Arabia's desire to be Part of brics and they are not the only Country now if this happens you'll be a Game changer it's not just about Saudi Arabia supplying oil to more customers But the destruction of the petrol dollar System and MBS proposal to join is being Taken seriously during the next brick Summit and from the way things are going It's just a matter of time before Saudi Arabia joins China and Russia in an Alliance to protect their interests from The west and if you're unfamiliar with Bricks it consists of five major Emerging economies Brazil Russia India China and South Africa the these are Economic Giants they are countries that Produce real goods and commodities and If Saudi Arabia gains entry we are Talking about a block that could control The energy production of the world so Why Saudi Arabia choosing to side with Bricks and not their own partner the United States because Saudi U.S Relations have hit rock bottom any
Semblance of mutual trust is fast Eroding away and let's recap what Happened over the last few weeks firstly OPEC plus decided to cut production by 2 Million barrels a day they want to show Up prices and earn more revenue and Because of that oil prices will stay High and the United States wasn't too Happy then President Biden about Consequences on Saudi Arabia what that Is no one knows but giving a warning to A leader of OPEC a group that controls 60 percent of oil exports isn't a smart Idea then Saudi Arabia shot back Claiming that the Biden Administration Actually asked them to postpone oil cuts By a month until after the elections and This situation is getting from bad to Worse Saudi Arabia joining bricks is the First step in undermining the US dollar Right now the dollar is still sitting Pretty on top of the world because it is Supported by Arab oil but once this Support drains away we could see the Fall of the reserve currency and a lot Of chaos erupting in the United States And across the world so what gives the Dollar its value right there are a lot Of narratives out there and the number One argument I hear is that a dollar is The most useful currency in the world And the global demand is high now that Is true over 70 percent of global trade Is still transacted in dollars and over
60 percent of foreign debt is issued in US dollars as well so there is an Organic need for dollars in our Financial system but we need to Understand what truly gives it its value The US dollar is a currency and like all Other currencies it is a medium of Exchange for goods and services it is an IOU a very colorful coupon to buy staff And because the U.S and Saudi Arabia had An agreement in the 70s to price oil in U.S dollars only in mid the dollar the Reserve currency with just one stroke The dollar became the most useful Currency in the world if you wanted oil You needed to pay in dollars and Countries began stockpiling the reserve Currency and started to trade with it Because at the end of the day the dollar Was as good as oil everything else is a Derivative of this primary function the Mobile Saudi Arabia or OPEC starts Transecting in another currency maybe It's the Yuan or the rupee then the Dollar will experience a rock pool and Fall flat and this is why saudi's desire To join bricks is a reshuffling of the World order the U.S has benefited from The reserve currency for decades they Enjoyed the lowest interest rates in the World they could print money up and Export inflation away with little Consequences and that's why when Russia Had that dollar Reserve sanctioned away
Putin had to scramble around find Alternatives we are talking about Demanding rubles for their guests and Selling their energy for the Chinese Yuan we all remembered that because Russia was too reliant on the US dollar System back then and it's because of This weaponization of the dollar and Trying to enforce rules on others that Saudi Arabia is just tired of Saudi Arabia is probably sick of being treated Like a gas station and being told to Pump more oil or else now if Saudi Arabia joins bricks they'll be at the Doorstep of forming a new world order it Will be a new group of commodity Giants That has the ability to fight against The financial power of the West we don't Know the United States and the West have The most sophisticated Financial Matrix They control the Swift system and could Lock out any country from easily Transacting with the rest of the world Russia has learned that lesson firsthand And even today a lot of the world's Capital is tied up in the west we just Need to look at the U.S treasury market Alone in 2021 foreign countries were Holding over 7.7 trillion dollars worth Of U.S debt a third of the total public Debt and because once again it is seen As a safe haven doing a crisis thanks to The Dollar's Reserve currency status but The brics Nations have a huge advantage
Over the West which is commodities for Example China is the biggest producer of Gold India and Brazil are gigantic food Exporters but let's talk about oil Because if Saudi Arabia joins brics we Have a group that controls the majority Of the world's oil we can see the United States tops the list with 18.5 percent Of the world's total oil production but If we add up the big producers in bricks Such as Russia China Brazil and we Include in Saudi Arabia we will get over 32 percent of global oil production and The numbers get even more interesting if We count in OPEC which controls at least 35 percent of output we will get a group That controls over half of global oil Production and a majority of exports and Remember Saudi Arabia is the leader of OPEC and this is the game changer again Against the petrol dollar system just Imagine a scenario where the brics Countries including Saudi Arabia Suddenly announces to the world that oil Can now be bought using the national Currencies of the brics members in Addition to US dollars so now if you Want to buy oil you can also use the Yuan the rupee or the ruble you don't Just need dollars anymore and because The moment you hold dollars you're at Risk of the Western Financial system Your dollar Holdings could get blocked From the Swift system or your assets
Could get Frozen if U.S sanctions you so There's a counterparty risk to just Holding the green back the US Dollars Already below 60 percent of global Currencies and if oil is no longer just Sold in dollars exclusively there'll be Less incentive to hold the currency Countries will start to diversify their Race away and start stacking currencies From the brics nation Saudi Arabia will Also hold less Risk by selling their oil In other currencies there's going to be Tremendous Synergy between the brics Nations is Saudi Arabia really joins the Block they are essentially Self-sufficient food from India and Brazil metals from South Africa Finnish Goods from China and most importantly Energy from Russia and Saudi Arabia and Let's talk about defense now this is a Big issue that underpinned the petrol Dollar Arrangement Saudi Arabia sells Their oil for dollars in exchange for American Security guarantees and a big Part of it is weapon sales now let's be Clear the Kingdom of Saudi Arabia isn't Located in the most peaceful region in The world one of Saudi Arabia's biggest Worries is Iran so it's natural for Saudi Arabia to want to have some Defense guarantees from the United States in exchange for subsidizing the Petrol dollar system however they've Been caused by U.S politicians to stock
Weapons sales to the country which is in A sense breaking one half of the petrol Dollar agreement America wants Saudi Arabia to reverse their oil production Cuts by using the Stick of weapons sales We have Chris Coons and U.S senator Saying I think you'll see both the Administration and the Senate take Action and one of the most likely Actions is to stop any future armed Sales now obviously if you're MBS and You hear a statement like this you Probably need to find alternatives for Your National Security the Saudis can't Approach NATO because they will side of The Americans and that's why the only Option that makes sense is Bricks now Back in July Saudi Arabia's foreign Minister Prince Faisal to CNN that if His country fails to get U.S arms they Will look for alternative supplies he Pacifically said we are always looking For what is best for us what fits our Technological needs but we are not going To make ourselves exclusive to one Supplier or the other because this Doesn't make commercial sense and he's Completely right if you restrict Yourself to one supplier even if the Products are good they could fleece you On a price or they could just hold their Sales to you and you're screwed and if You take a look at the world's biggest Arm Xbox Waters we can see that United
States is clearly in the lead at 39 but Just Russia and China of the brics block Makes up 23 percent of arms exports so It's not impossible for Saudi Arabia to Get their weapons from the brics Nations Even India is growing their defense Manufacturing aiming to export 5 billion Dollars worth of Arms by 2025. so America truly isn't the only weapons Marketplace for the Saudis with bricks They can shop around and do all sorts of Bilateral deals without using the dollar They can sell oil to India for arms or They could buy weapons from China using The Chinese Yuan it's a very flexible Arrangement once you bypass the petrol Dollar system and if America stops Selling arms Saudi Arabia can get them Elsewhere and they no longer have to Stick to the petrol dollar agreement so Saudi Arabia joining bricks could mean a Lot of things to the world they can Swing the prices of oil establish new Security agreements but let's just focus On the dollar because if the petrol Dollar system is broken up it will cause A lot of pain to the US economy and we Need to understand why the end of the Petrol dollar is so disastrous for the US it eliminates two powerful Advantage They have and it is these two things That give the United States the Lee way To become the superpower it is today now Firstly America's ability to borrow
Money at dirt cheap interest rates will Be over this means much slower economic Growth and local consumption will create The the US is the world's biggest Consumer market and it's all because of Cheap credit because the dollar was the Reserve currency oil exporters including Saudi Arabia they did something called Petrol dollar recycling basically they Took their dollar Holdings and they Bought up a whole bunch of U.S Treasuries they do it to earn some yield On their reserves and the rest of the World they followed suit and began Dumping their dollar cash into Treasuries as well so trillions of Dollars they have been pouring to U.S Bonds keeping their use ultra low just Look at the 10-year yield across history The US had 40 Years of declining rates And cheap borrowing costs and when the Petrol dollar system breaks other Countries will start holding fewer Dollars and less money will flow back Into treasuries we're going to see use Go up and stay up companies won't be Able to borrow as much money consumers Can't spend as much and the U.S economy Won't be able to grow just as fast the Era of cheap credit will be over and the Second ability the us will lose is the Power to print money and get away with It and this is the most powerful weapon The Federal Reserve has to keep the US
Economy healthy in the short term at the Expense of the whole world now since 2008 every time the American economy Started to slow down or crash the Default response was to fire up the Printing presses and do quantitative Easing the FED would print money and Flood the system with liquidity to save The economy however it comes at the cost Of inflation down the road in doesn't Happen immediately now let's go back to 2020 when the FED printed up trillions Of dollars power took the balance sheet For 4 trillion dollars to over 9 Trillion but inflation was an instant it Took around 12 months for inflation to Work through the system and manifest Itself it went from under two percent in Early 2020 all the way to five percent In just a year and today it's over eight Percent easily but here's the amazing Thing about having the reserve currency Everyone holds your currency so there's An ocean of Dollars around the world That you can dilute you gain the Immediate effects of money printing Which is popping up your economy but the Rest of the world gets the hidden tax Which is inflation you exported your Inflation away a smaller country can't Get away with that they'll probably go Into hyperinflation but if the dollar Loses its Reserve status there will be Nowhere to hide the money printing games
Will become immediately apparent and the Federal Reserve will lose its favorite Weapon of choice and that's why the US Government they've been fighting tooth And nail for decades to keep the dollar As the de facto currency of choice but What they seem to have forgotten is the Fundamentals of what a currency is they Forget that the dollar is backed by oil And the moment that backing goes away it Is just a piece of paper and that's why World events like this are extremely Important to watch the conventional idea Of investing in the SMP for 10 a year Forever that hinges on the United States Still possessing the reserve currency Status and the moment they lose it a Daily cycle of events will happen and Because the U.S to be less competitive Now it doesn't mean that the country Will melt down in total chaos but the U.S economy will be on a more equal Footing with the rest of the world and If you're American your mortgage rate Will shoot up and government borrowing Will get tougher it could even mean Defaulting on a national debt or Spending cost of Social Security and Healthcare could happen maybe even the Defense budget could get slashed and we Already seeing the effects of yields Rising from this currency crisis central Banks around the world have already done One trillion dollars in reserve this
Year alone to defend their currencies From devaluation against the dollar Japan is dumping India is selling and China is betting against the dollar as Well now just imagine once the reserve Status is lost countries will start Offloading Dr dollars because it will be Less useful some will dump it to buy Gold others will buy up U.S assets like Farmland and real estate but either way This flood of dollars rushing back into The states will cause higher inflation And potentially trigger a debt crisis Because there's a lesser desire to buy U.S bonds so you can see the domino Effect of the events that can transpire If the petrol dollar system breaks Saudi Arabia holds all the cards today and if The U.S actually stops armed sales to The kingdom this will almost guarantee The move towards bricks we will see more Bilateral deals start to happen new Security Arrangements will be made and The dollars days will be numbered so let Me know what you think will Saudi Arabia Join the brics block will the U.S make Things worse by punishing Saudi Arabia Let me know in the comments below stay Safe be sure to smash that like button Subscribe as we navigate through these Crazy times
