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BRICS+
I’ve been a member since 2011 and this is my first post. I’ve been a federal worker until this month (retired after 33 years) and I take the Hatch Act seriously. Unfortunately, it’s become cleat the senior levels of the deep state do not have this concern.
I want to take advantage of my familiarity with this community to both raise awareness of, and possibly dispel, my growing anxiety about what I think are significant geopolitical issues.
Background:
In 2009 Brazil, Russia, India, China and South Africa formed an economic alliance to invest in developing nations as an alternative to the Western-dominated World Bank and IMF. In December, Saudi Arabia, UAE, Egypt, Ethiopia, Iran and Argentina were invited to join.
https://www.forbes.com/sites/tilakdoshi/2023/08/29/brics6-vs-g-7-the-quest-for-multipolarity/
The stated goal of the BRICS+ is to supplant the dollar and the euro as the dominant world’s reserve currency. The only reason I can think of why the Saudis, Egyptians, and Emirates would join the Iranians in such a relationship comes down to China. What might China have to do with this? Simple self-interest on behalf of the Gulf states. China consumes much of the Middle East’s petroleum. In the event that China does something to warrant international sanctions, the Gulf states would need an alternative to the dollar to continue to trade with China.
Analysis:
Recently, Germany, after pulling back on its promise to send aid to Ukraine, directed the interest on frozen Russian assets to Ukraine instead. This spurred the Saudis to warn the Germans that such a move would be a red line, and that Saudi Arabia would dump all sovereign debt.
As I write this, the US is currently upside down on debt to GDP, with OMB projecting to add another $11 trillion to our debt through deficit spending over the next 9 years. These are big numbers, so let me provide some context. Today the single most expensive item of discretionary spending is maintenance on our debt, which amounts to ~$1 trillion; the second most expensive item is the roughly $800 billion we spend on the entire DoD (yes, the Army, Navy, Marines, and Air force as well as the entire Intelligence community.) In other words, each year we are spending more on debt maintenance than on national security. Remember that OMB projects this to get worse as deficit spending continues. OMB’s projection of debt/GDP by 2027 is 120%. The last time the US was in this situation was 1947—after fighting WWII.
Opinion:
The BRICS+ have a common thread beyond self-interest. They are all autocracies of one form or another. Russia and China have consistently expressed revanchist goals. With Western deterrence at an all-time low and with the mitigation of our best soft power weapon—sanctions—what we may be seeing is a realignment in the world’s geopolitical order between democracies and autocracies. If so, we need to consider the current strife not as independent wars but as separate but related battles in what may become a global war.
Today, the BRICS+ are more than a financial consortium. There are cultural, technological, and military elements to their cooperation.
I’m hopeful that I am wrong about my analysis and conclusions. In any case, we may want to think about our debt and deficit in terms of national defense as well as how they impact the economy.
Published in Finance
***Constant deflation as God intended man to live***.
They don’t even come close to measuring inflation right and they shove it down our throats. Then they tell everybody to lever up and buy a house in 2004. Then, all of those people get wiped out. Now nobody can afford anything.
It would help if “everyone” wasn’t trying to live in NYC, LA, SF, etc.
Elaborate.
I’ve covered it before. We need to be building new cities, not just trying to cram more and more people into the existing ones. It’s harder now because cities need to have a bunch of stuff in place before anyone will move there.
That sounds like central planning to me. It can be done (as was done with the building of Brasilia) but I’m against it.
I am in favor of trying to create an environment in which our population centers will decentralize themselves, but there are so many different factors at work that it’s hard to know for sure just how it will work out. That in itself would at least makes such efforts interesting.
Various developers in the past have done it, often creating “retirement communities” centered around golf courses etc. Doing so for unretired people still needing employment etc, would be more difficult and perhaps beyond the reach of regular real estate developers, even with tax benefits etc. For sure it’s a lot more difficult now, versus in the past when new towns might spring up from the first person who built a house next to a river, or at some crossing of wagon paths etc. But they didn’t expect to have water, sewer, and communications already in place before they started. Indeed, the way government essentially requires, now. They say you can’t just poop in a hole in the ground any more.
The Chinese don’t need to invade just blockade. That will be the strategy. I’m not convinced that the CCP has factored in the Japanese or the Philippines. but do we have the will to break the blockade? The JDF is well trained and will be stalwart. The Philippines know the consequences of capitulation.
On a good note the TSCM factory in Arizona is up and running and is producing better advanced CPU’s than the Taiwanese.
And remember autocracies do econopmic pain much better than western democracies. Basically the CCP doesn’t care about the 1.4 billion citizens beyond whether they can control them.
That said, a collapse may become a catalyst for war. Keep in mind that the belt and road strategy has irrevocably linked many developing nations to the CCP’s will. We may end up the enemy of 75% of the worlds population if we cause China to crash.
From my pewrspective, lets do it and get it over with.
One final note: the CCP has built a huge navy (400+ ships) but the cost of a navy isn’t in the building, it’s in the maintenance. And by 2027 that cost will become untenable. So….when do you think this frog is gonna jump?
I couldn’t agree more
We are a week from Kazan (the BRICS+) summit. Attended by the secretary general o the UN (who shook Putin’s hand although the UN has declared Putin a war criminal and the ICC put out an arrest warrant for him) . We are certainly looking at a challenge to the G7 as well as western democratic values. Heck, Modi and Xi met to discuss how to end the Line of Control in the Himalayas. This is all going in the wrong direction, And we are focused on trans BS and other inconsequential BS.
We need to pay attention or we will suffer. What if the Russians already have a nuke (or several) in LEO (low earth orbit)? un-warned EMP.
This is a huge deal that not enough people in the West think about. I am so sick of experts and the ruling class. They were the ones that told us that China was going to turn into a democracy if we just started trading with the communist mafia.
Swell.
The economy is constantly producing deflation. The Federal Reserve forces inflation. This is what is going to happen.
Isn’t China collapsing on its own?
Not that some wouldn’t blame us for it, regardless. But facts should be facts.