What is BRICS explained | How CHINA is using BRICS to kill US Dollar | Abhi and Niyu
Summary
TLDRThe video discusses the potential for BRICS (Brazil, Russia, India, China, and South Africa) to challenge US dominance by creating a new currency, possibly backed by gold, to end dollar hegemony. It explores the economic and geopolitical implications of BRICS, the history and development of the Euro as a model, and the necessity for India and China to improve relations to make a common currency feasible. The video emphasizes the importance of cooperation among BRICS nations and invites viewers to engage with the channel for more insights on geopolitics and economics.
Takeaways
- 🌏 India and China are rivals, but BRICS may bring them together.
- 🌐 BRICS includes Brazil, Russia, India, China, and South Africa.
- 💰 BRICS is planning a new currency to challenge the US dollar.
- 🔍 BRICS was formed after the 2008 financial crisis.
- 👥 23 countries, including Saudi Arabia and Iran, have applied to join BRICS.
- 📈 BRICS countries account for 42% of the world's population and 17% of global trade.
- 🪙 The new BRICS currency might be backed by gold.
- 🇪🇺 The creation of the Euro took a long time, and BRICS might follow a similar process.
- 💡 BRICS' ultimate goal is to reduce Western dominance.
- 🤝 For BRICS' success, India and China need to improve their relations.
Q & A
What is BRICS?
-BRICS is an organization that brings together the top non-Western countries, namely Brazil, Russia, India, China, and South Africa, to collaborate on economic and geopolitical matters.
What is the rumored plan of BRICS regarding currency?
-There are rumors that BRICS wants to create a currency that could potentially end the dominance of the US dollar.
When did BRICS start and why?
-BRICS started after the 2008 financial crisis when Brazil, Russia, China, and India's leaders met for the first time in Russia. South Africa joined the group in 2010.
What is the significance of BRICS in terms of global population and trade?
-BRICS represents 42% of the world’s population and accounts for 17% of global trade. The group also covers one-fourth of the world’s land.
Why is the US dollar considered a weapon in global finance?
-The US dollar is seen as a weapon because the US can impose sanctions, like those on Russia during the Ukraine war, which include removing countries from the SWIFT system and freezing reserves, thus controlling global financial transactions.
How is China preparing for potential sanctions similar to those imposed on Russia?
-China has been increasing the use of its own currency, the yuan, in global trade and has been preparing to face potential sanctions by building up its gold reserves and seeking alternatives to the US dollar.
What historical example is used to explain the complexity of creating a new currency?
-The creation of the Euro is used as an example, which took over a decade of preparation, including the establishment of the European Monetary System and the Maastricht Treaty.
Why is the friendship between India and China crucial for the success of a BRICS currency?
-A common currency for BRICS is seen as impossible until India and China, the two biggest players, resolve their differences and cooperate both economically and politically.
What were the consequences of the clashes between India and China in the Galwan Valley in 2020?
-The clashes resulted in the death of 20 Indian soldiers, worsened relations, led to increased military presence at the border, and caused India to ban Chinese apps and raid Chinese companies.
What are the three critical aspects required for a new currency to be successful according to the video?
-The three critical aspects are expansion (more countries joining BRICS), acceptance (countries making collective decisions), and trust (linking the currency's value to gold).
What are the benefits of the Euro that the BRICS currency aims to replicate?
-The Euro brought economic stability, facilitated easier trade within Europe, and created neutral institutions like the European Central Bank, which increased political stability.
What steps are necessary for BRICS to create its own currency?
-BRICS needs to enhance cooperation among its member countries, ensure economic and political collaboration, and possibly follow a model similar to the Euro, taking into account geographical and ideological differences.
Outlines
🌏 India's and China's Rivalry and BRICS
India and China are significant rivals globally, but BRICS (Brazil, Russia, India, China, South Africa) might offer a path to cooperation. BRICS, an organization uniting top non-Western countries, is rumored to be planning a new currency to challenge the dollar's dominance, potentially leading to de-dollarization and fostering collaboration between India and China.
🌍 What is BRICS?
BRICS was formed after the 2008 financial crisis, initially including Brazil, Russia, India, and China, with South Africa joining in 2010. Despite consisting of only five countries, BRICS has a substantial global impact, covering 25% of the world's land and 42% of its population. The group's goal is to counter Western power, as evidenced by the increasing number of countries interested in joining, including Saudi Arabia, Iran, and the UAE.
💰 BRICS' Economic Master Plan
The Russia-Ukraine war highlighted the US dollar's role as both currency and weapon, prompting BRICS to consider alternatives. With significant global trade in US dollars, BRICS members are increasing their gold reserves, signaling preparations for a new, gold-backed currency. Key to this plan are expansion, acceptance, and trust among BRICS countries.
💶 Understanding the BRICS Currency Concept
The process of creating a new BRICS currency can be compared to the Euro's development. The Euro, now used by 20 EU countries, was introduced after years of preparation and coordination. Similarly, BRICS would need significant time and cooperation to establish a new currency, addressing economic stability and political considerations.
🤝 India-China Relations and BRICS
For a BRICS currency to succeed, India and China must improve their strained relations, worsened by the 2020 Galwan Valley clashes. Despite ideological differences, cooperation between these Asian giants is crucial for BRICS' economic objectives. Upcoming events, like the G-20 summit in India, might offer opportunities for reconciliation.
📉 Conclusion and Future Prospects
Creating a BRICS currency is a complex but necessary step to challenge Western economic dominance. Increased cooperation among BRICS countries is essential. Viewers are encouraged to subscribe to the channel to learn more about global economics and geopolitics, as the world moves towards a multipolar future with multiple great powers.
Mindmap
Keywords
💡BRICS
💡De-dollarization
💡Geopolitics
💡Economic sanctions
💡Gold reserves
💡Euro
💡SWIFT
💡Multipolar future
💡G-20
💡Maastricht Treaty
Highlights
India and China are the biggest rivals, but BRICS could make them friends.
BRICS is an organization that brings the top non-Western countries together: Brazil, Russia, India, China, and South Africa.
Rumors suggest BRICS wants to create a currency to end dollar dominance.
BRICS countries represent 1/4th of the world's land and 42% of its population.
23 countries have applied to join BRICS, including Saudi Arabia, Iran, and UAE.
BRICS aims to challenge US dominance by bringing together the fastest-growing economies.
The US dollar is not just a currency but also a weapon, as shown by sanctions on Russia.
China's economy depends heavily on trade, and it fears US sanctions if it attacks Taiwan.
BRICS countries have been increasing their gold reserves to support a new currency.
A successful new currency needs expansion, acceptance, and trust.
BRICS' new currency plan draws lessons from the Euro, which took 10 years to prepare.
India and China must become friends for a BRICS currency to be feasible.
The Galwan Valley clash in 2020 worsened India-China relations.
China and India's friendship is crucial for BRICS' success.
The Euro brought economic stability and political cooperation in Europe, which BRICS can emulate.
Transcripts
India and China
are the biggest rivals in the world.
But there is a master plan
that can make both the countries friends
Or at least, can try
and that is BRICS
BRICS means a organization that brings
the top non-western countries together.
Brazil, Russia, India,
China and South Africa.
Today, rumors are that BRICS
wants to make a currency
that will end the dollar dominance
Is this the beginning of de-dollarization?
Can this be the reason
India and China become friends?
And how does it matter to us?
Let's find out in today's video
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Chapter 1:
What is BRICS?
BRICS started
after the 2008 financial crisis,
when Brazil, Russia, China, and India,
that is, India's leaders
met for the first time in Russia
South Africa became a part
of this group in 2010
If you see, BRICS
is a group of only 5 countries
but it has a very big impact
In total, the world's 1/4th land
and 42% population is included in BRICS
And among these 5 countries,
one or the other country
is part of the world's 17% trade
BRICS is so important
that 23 countries
have applied to become a part of it.
Including countries like Saudi Arabia, Iran, UAE.
Today, there is only one superpower in the world
and that is America.
Finance, technology, military,
if you look at it from all 3 angles,
there is no one country in the world
that can compete with America alone.
Not even China.
So if not one nation,
maybe a group of nations can challenge USA
BRICS is such a group
that wants to bring the fastest
growing economies of the world together.
This year, the members and leaders of BRICS countries
are going to meet in South Africa.
But what does it mean to come together?
Is it enough to just have meetings?
Or is it necessary to have some other objective?
In the early days, BRICS nations
had no particular goal.
But today, geopolitics
is taking shape in such a way
that BRICS' objective is getting clear.
And that is the end of the power of the West.
Chapter 2:
BRICS' economic master plan.
The Russian-Ukraine war
has reminded the whole world of one thing
that the US dollar is not just a currency,
but a weapon.
As soon as Russia attacked Ukraine,
America imposed various sanctions on Russia.
They removed Russia from the SWIFT
international money transfer system.
They froze their $300 billion reserves.
Today, 80% of the world's trade
is in the US dollar.
A country's central bank
keeps some stable foreign currency reserves.
Which are called Forex reserves.
Out of which, 59% of the reserves
are in US dollars.
And the US Fed controls these dollars.
That is not only in America,
but also outside America,
how can each dollar be used,
is fully controlled by America.
The Chinese economy
is completely dependent on trade.
One-fifth of China's total GDP
comes from its exports.
Just like Russia has an interest in Ukraine,
similarly China is interested in Taiwan
China wants to make Taiwan
officially a part of its mainland.
That means, today or tomorrow,
China will have to attack Taiwan.
And if this happens, then America
will impose sanctions on China as well.
This is the only fear that is stopping China
from attacking Taiwan.
That means, China will not be able
to trade with America and other major countries.
China is already preparing for this from 2009.
Because today, 6% of the world trade
is done in Chinese yuan.
This year, Alexander Babakov of Russia
said that Russia is focusing on making a new global currency.
The easiest way to understand China's economic master plan
is to put all the recent events on a timeline.
What have we seen so far?
In 2009, BRICS started,
and that too after the 2008 financial crisis.
After that, since 2014, every year,
BRICS countries have been meeting each other.
After the pandemic in 2020,
many countries
had to go through an economic crisis.
Many of them were refused help by IMF.
In March 2022, Russia invaded Ukraine
and the West imposed sanctions on them.
But the rest of the world
did not stop trading with Russia.
De-dollarization started from December 2022.
In this year, 2023
a major bank in America,
Silicon Valley Bank, collapsed.
And like 2008,
a similar situation was created.
The same situation
that gave birth to BRICS.
And since April 2023,
all the countries of BRICS
have been increasing their gold reserves.
India bought 3 tons,
Russia bought 31 tons,
and China bought 102 tons of new gold.
All these signals indicate that BRICS
is preparing to launch its new currency.
And that too a currency
that is backed by gold.
To make a new currency successful,
3 things are important.
Expansion, acceptance, and trust.
Expansion, when more countries
will be a part of BRICS.
Acceptance, when all countries
will be able to make decisions.
And trust, when the value of that currency
will be linked to gold.
And all these three directions,
work is being carried out.
Chapter 3:
Idea of the new currency.
Understanding the possibility
and process of BRICS currency
will be easier after understanding
the process of another currency.
This is Euro,
which is the central currency of Europe.
Which is used in 20 countries of the EU.
Along with that, these non-EU countries
also use Euro.
The point is that in 1979,
when EMS was launched.
EMS, means European Monetary System.
The main purpose
of EMS was to monitor at what rate
different European currencies will be exchanged.
Which is called ERM,
Exchange Rate Mechanism.
The idea of a single currency came in 1987
because of France and West Germany.
West Germany had deutsche mark
and France had franc as currencies.
But after a point,
deutsche mark as a currency
started becoming very strong.
Germany's economy
runs on manufacturing.
And by exporting their heavy machines and cars,
they run the country.
If the currency becomes very strong,
then it will be difficult for factory owners
to make things in Germany.
Because, laborers
will have to be paid more salaries.
If the prices are high,
the demand will decrease.
And in the long run,
the industry will be ruined.
On the other hand,
France's economy
was not growing as fast as Germany.
But because of ERM,
their currencies were tied to each other.
It was an economic disaster
that was waiting like a ticking time bomb.
To prevent this,
a treaty was signed in the countries of the European Union.
Which is called the Maastricht Treaty.
This treaty was signed in 1991
and Euro was launched in 1999.
But how?
This was not an overnight decision
like demonetization.
It took 10 years to prepare.
Even after the launch, for 3 years,
Euro was an invisible currency.
That is not in the hands of people,
It was only being used in accounting.
Today, there are 11 locations in Europe
where Euro is printed.
6 billion notes are printed every year.
Before Euro came, if a businessman
had to go to different countries in Europe
to do business,
he had to carry 10 different wallets.
In every wallet,
a currency of a different country.
And remember,
this is not the era of the internet.
Where we quickly open our phones
and check the currency rates.
For example, in Italian lira,
there were even 5 lakh notes.
And the French franc
would only print a 500 note at the max.
In the early times of Euro,
it was very complicated to calculate
all these transactions mentally.
For Europe, Euro was a very good idea.
Because, number 1.
The trade ties in Europe were very good.
Number 2.
The same currency
brought economic stability.
Number 3.
New and neutral institutions
like the European Bank were created
which increased political stability.
In short, in the story of Euro,
we understood
that even to make a currency like Euro,
it took a lot of time.
Because, it is not easy
to create a new currency.
Now, it is important for BRICS to think
that can we use the same model?
Can we create our own currency
and start trade in this new currency?
Chapter 4:
Friendship between India and China.
Jim O'Neill is an economist
who published a paper in 2001.
Where he, for the first time,
used the acronym BRIC.
He says that creating a common currency
is an embarrassing idea.
Because, until India and China
don't become friends,
until then a common currency
is impossible.
And if you look at the recent history,
you will understand why.
In 2020, in the Galwan Valley,
there were clashes
between the forces of India and China.
In which 20 Indian soldiers lost their lives.
After this moment,
the relations between India and China
got worse.
We sent 68,000 troops to Ladakh.
We banned 300 Chinese apps
and started tax raids on Chinese companies.
19 times, the armed forces of both the countries
met for military-level talks.
But, the armed forces of both sides
are manned at the border.
China for the last 10 months,
has not sent any ambassador to India.
Today, Western countries
feel comfortable seeing the rivalry between China and India.
Because, the concept of divide and rule
has not yet gone out of fashion.
India and China
are quite different ideologically.
We are a democracy
and China is a dictatorship.
India has diversity
and China has uniformity.
But, now if China wants to challenge America,
Russia, to control its economy
wants to make an alternative to the dollar,
then India and China
will have to come on the same page.
Because, ultimately,
these two countries
are the biggest players of BRICS.
Western media calls them
Asian giants.
China and India's friendship
can prove beneficial to all the countries of BRICS.
And efforts are also made in the right direction.
G-20 is happening in India
and it is possible that Chinese President,
Xi Jinping come to India.
When Xi Jinping came to India in 2017,
he started military de-escalation
to improve relations before that.
Similarly, there's a possibility even now.
Foreign ministries of both the countries
are talking about it.
BRICS' economic master plan
will be successful only when
we are ready to cooperate
economically and politically.
In conclusion, we have to realize
that the Euro,
which is a multinational currency,
took 10 years of preparation.
After the Euro was launched in 1999,
it was an invisible currency for 3 years.
It was not in the hands of the common people.
It was used only for some specific purposes
And that too in those countries
which are quite similar ideologically
and quite close geographically.
BRICS currency is an interesting idea
and quite necessary too.
That in the future is sure to be executed
to break the Western monopoly.
But before that,
cooperation needs to increase in these 5 core countries.
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