The U.S. Dollar was Just REJECTED | Saudi Arabia & BRICS - Dedollarization.
Summary
TLDRThe video discusses Saudi Arabia's potential move away from the US dollar in oil transactions, signaling a shift in global power dynamics. It explores the implications of this decision for the US economy and inflation, considering the context of the BRICS+ nations and the US's reduced dependence on Saudi oil. The host suggests that while the petrodollar's importance is significant, diversifying investments into assets beyond the dollar is prudent. The video concludes by emphasizing the need for personal financial strategies that mitigate risks associated with currency fluctuations.
Takeaways
- 🌍 Saudi Arabia's decision to not renew the agreement to sell oil exclusively in US dollars could signal a shift in global economic power dynamics.
- 🔄 The BRICS nations, with the potential addition of other countries, are forming a bloc that may challenge the dominance of the US dollar in international trade.
- 📉 The US is no longer the primary oil consumer that it once was, with domestic production via shale and fracking revolutionizing the energy landscape.
- 🛑 Saudi Arabia may be reconsidering its relationship with the US, possibly due to the US becoming less dependent on their oil and other geopolitical factors.
- 💡 The 'petrodollar' system, where oil is predominantly traded in US dollars, is crucial to the dollar's global status, but its importance is being questioned.
- 🏦 The US dollar's role as the world's reserve currency is tied to approximately 80% of global trade, including a significant portion of the oil market.
- 📈 The US economy is significantly larger than any single BRICS nation and continues to be the largest economy in the world.
- 💼 Diversification away from the US dollar into other assets like real estate, stocks, or cryptocurrencies is suggested as a way to hedge against currency risks.
- 🌐 The potential for a multipolar world where the US is just one of several powerful nations is growing, with implications for the global currency system.
- 🤔 There is a growing sentiment among Americans about the potential loss of American exceptionalism, possibly due to various domestic issues.
- 🚀 The focus should be on building assets and wealth, rather than solely on the potential devaluation of the US dollar.
Q & A
What does the acronym 'BRICS' stand for and what is its purpose?
-BRICS stands for Brazil, Russia, India, China, and South Africa. It is an organization that has pooled about a hundred billion dollars of funding together to provide emergency loans to each other if needed, and it is often associated with efforts to reduce the dominance of the US dollar in global trade.
Why is the addition of new countries to BRICS significant?
-The addition of new countries such as Iran, the UAE, Ethiopia, Egypt, and Saudi Arabia, potentially Turkey, Malaysia, and Thailand, signifies the expansion of BRICS into 'BRICS Plus', which could further challenge the traditional Western powers and the US dollar's dominance in global trade.
Outlines
🌍 Saudi Arabia's Shift from the US Dollar and Its Implications
This paragraph discusses Saudi Arabia's decision to reconsider its 1974 agreement with the US to sell oil exclusively in dollars, and its potential move towards joining BRICS Plus. The growing alliance of BRICS (Brazil, Russia, India, China, South Africa) is now expanding to include other nations such as Iran, UAE, and potentially Saudi Arabia, among others. This shift signals a challenge to US economic dominance and a decline in American exceptionalism, with potential long-term impacts on the global influence of the US dollar.
🛢️ The Changing Dynamics of Oil and the US Dollar
The focus here is on the evolving relationship between Saudi Arabia and the US in the context of oil production and currency. The US, now the largest oil producer, imports significantly less oil from Saudi Arabia compared to the past. This shift has reduced the US's dependency on Saudi oil, undermining the original basis for the 1974 agreement. As Saudi Arabia's oil exports shift towards China, there's a natural move towards trading in Chinese currency instead of the US dollar, reflecting the changing global economic landscape.
💸 The Petro Dollar and Its Waning Influence
This paragraph explores the significance of the Petro Dollar in global trade, noting that while 80% of global oil trade is in US dollars, the overall US economy is vastly larger than the oil market. Despite the potential for other currencies to gain traction in oil transactions, the US dollar's dominance is supported by the scale of the US economy. The narrative suggests that while shifts in global oil trade dynamics could affect the dollar, they won't necessarily lead to a major decline in its global standing in the short term.
🏠 How to Navigate Potential Declines in US Dollar Dominance
Here, the discussion pivots to personal financial strategy in light of potential declines in the US dollar's dominance. The advice emphasizes the importance of investing in assets like real estate, stocks, and cryptocurrencies rather than holding cash. The comparison to the decline of the British Empire and the Roman Empire suggests that while US dominance may eventually wane, the key is to build and diversify assets now to mitigate future risks.
📈 Investment Strategies Amid Global Economic Shifts
This final paragraph highlights the importance of building wealth through asset investments, mentioning courses and strategies for real estate and stock market investments. The narrative reassures that while dollarization concerns are growing, they shouldn't drive fear but rather strategic planning. The paragraph closes with a disclaimer about the video's content not being personalized financial advice and emphasizes the speaker's credentials and affiliations.
Mindmap
Keywords
💡BRICS
💡De-dollarization
💡Petrodollar
💡Saudi Arabia
💡US Dollar
💡Inflation
💡Oil Market
💡Economic Power
💡Global Trade
💡Asset Investment
Highlights
Saudi Arabia has stopped using the US dollar for oil transactions, a move that could impact the US economy and inflation.
BRICS nations, including Brazil, Russia, India, China, and South Africa, have formed an organization to provide emergency loans to each other, challenging the US dollar's dominance.
The BRICS group has expanded to include Iran, the UAE, Ethiopia, Egypt, and potentially other countries, indicating a shift in global alliances.
Argentina was invited to join BRICS but declined, showing a preference for maintaining alliances with the US and Israel.
The US, as the largest oil producer, has reduced its dependence on Saudi oil, altering the dynamics of the 1974 agreement with Nixon.
The potential for a 'BRICS Plus' group signifies a growing movement against the traditional Western alliances led by the US and Europe.
The US dollar's value is tied to its use in global trade, especially in the oil market, which was estimated at $1.4 trillion in 2022.
The US economy is significantly larger than China's and the combined GDP of other BRICS members, suggesting the dollar's strength may not be as threatened as perceived.
The speaker suggests that individuals should diversify their assets to mitigate risks associated with the US dollar's potential devaluation.
The US may face long-term challenges such as depopulation and a slowdown in economic innovation, affecting its global dominance.
The growing popularity of the topic 'dollarization' reflects American discontent with perceived loss of exceptionalism due to various socio-economic issues.
Saudi Arabia's cautious approach to joining BRICS indicates a strategic move that could be a vote against the US.
The speaker emphasizes that the focus should be on building assets rather than worrying about the potential devaluation of the dollar.
The speaker provides a list of investment opportunities, including real estate and stock market alerts, as a way to hedge against currency risks.
The video concludes with the speaker's opinion that the current situation does not warrant significant fear and that individuals should focus on asset diversification.
Transcripts
Saudi Arabia just dumped the US dollar
what this means for United States and
inflation could be a big deal a lot of
people are talking about this and a lot
of people have been asking Kevin what is
your opinion for example our good buddy
Andre J made a fantastic video on this
topic great editing too way better than
the editing that I will do in this video
which is next to zero but what I'm going
to do is give you a quick background of
what's going on and then I'm going to
talk about implication for this so first
of all if you don't know yet bricks
Brazil Russia India China South Africa
now that is an organization that has put
about a hundred billion do of funding
together and they can give emergency
loans to each other if they need to and
brics has regularly been thought of in
the same sentence as dollarization in
other words the more these countries try
to have a common currency or common
trade agreements the less powerful the
United States is fair now what's
interesting is starting in January 24
bricks has doubled in size it probably
shouldn't really be called bricks
anymore because now it includes Iran the
UAE Ethiopia Egypt and Saudi Arabia was
announced as a member but they actually
pulled that back and said we're still
studying if we want to be a part of it
turkey has appli to join and Malaysia
and Thailand may end up joining as well
now Argentina was invited but president
mle have mlay chainsaw guy decided
against it Malay indicated that his ally
is the US and Israel not China and
Brazil so what does that reiterate to
you hm interesting Us Versus Them In
other words bricks versus the West which
would be the Euro the US France Canada
Germany Italy Japan the United Kingdom
these are sort of your traditional
Western allies versus now the Brazil
Russia India China South Africa and then
potentially the others that I mentioned
as well so people are sort of picking
sides but what a big deal is is that at
the same time as Saudi Arabia is
reviewing the potential for joining
bricks and being part of the group
that's now being called bricks plus you
have this announcement on June 13th that
Saudi Arabia will not be renewing an
agreement they signed with Nixon back in
1974 to sell oil exclusively in the US
dollar both of these things happening at
the same time are sending the signal
that the US is losing its strength and
power in the International Community and
that American exceptionalism is decaying
away and the dollar is going to go to
crap and you're going to be screwed with
inflation
forever okay now we'll talk about how to
deal with all of that in just a moment
but first it's worth thinking
practically why why would Saudi Arabia
ice the United States is it because
Saudi Arabia is pissed off at the United
States is Saudi Arabia trying to send a
signal that the US
sucks maybe but it could also be that
Saudi Arabia is no longer the number one
supplier of oil for the United States it
might have to do with the fact that
Saudi Arabia used to be the number one
oil producer in the world but this has
flip-flopped thanks to the Shale and
fracking revolution in the United States
case in point the United States as
listed here is now the number one oil
producer in the world and we import less
than onethird as much oil as we used to
from Saudi Arabia in other words we
showed Saudi Arabia up in the oil Market
we blew them out of the water with oil
production and we're buying less oil
from them so back when this agreement
was signed where the dollar just left
the oil or the dollar just left the gold
standard and we needed Saudi Arabian
oil those factors have essentially
flipped now we produce the most oil in
the world we need Saudi Arabia probably
not at all in fact probably the oil that
we do buy from Saudi Arabia is just to
sort of maintain some relationship with
them we probably don't need any oil from
them and we need less confidence in the
US dollar net now than what we needed
back then now I know that might sound
crazy you might be thinking to yourself
Kevin I don't trust this dollar at all
and trust me you shouldn't you
definitely shouldn't keep your money
exposed to the dollar let's be clear
about that # notp personalized Financial
advice but back in
1974 we just left the gold standard for
a few years inflation expectations were
skyrocketing the opposite of what's
Happening Now and inflation was
skyrocketing still also the opposite of
what's happening now yes inflation did
Skyrocket but now it's not skyrocketing
anymore if anything it's disinf lating
and so we actually need less support for
the dollar today than we did then
because back in the 70s people like what
money not backed by gold this is a scam
every fiat currency that has ever
existed before in history has failed and
your boy Kevin is out of
coffee so why should we trust it well
cuz Saudi Arabia exclusively uses it
they're the largest oil producer in the
world notice how then is actually almost
the opposite of what we see now we are
the largest oil producer we don't need
them to reiterate our fake funny money
anymore and if anything Saudi Arabia's
top client just became China and it
entirely makes sense that they probably
ought to start trading oil in Reni
Chinese
currency as opposed to the US dollar now
I'm not not encouraging
dollarization just saying it kind of
makes sense now this is where it's kind
of worth thinking about the Petro dollar
and the importance of it in the first
place about 80% of global trade is
traded in the US dollar the oil Market
in 2022 was estimated to be about $1.4
trillion and so 80% of that is somewhere
around 1.14 $1 1.15 trillion Okay cool
so if the oil Market is 1.14
trillion how does that compare to just
our GDP alone in other words our GDP
that's traded in dollars right gross
domestic product our GDP is 24x the
entire oil market so yes the oil Market
seems like a really big deal but let's
be real the US economy itself is 40%
larger than China and China's GDP is
twice X all of the other bricks members
from last year so like we are huge
compared to all of them in the bricks at
the United
States and even if all oil transactions
were conducted in some other form of
currency you know we could slow bleed
this or it all evaporates tomorrow there
would still be plenty of demand for the
dollar given that we are the largest
economy in the world now could that
change could the United States suffer
depopulation or uh you know slowing
population growth much like China is
experiencing now although their economy
in worse off shape shape than ours is uh
could the United States economy uh end
up stop innovating could China
eventually have a larger GDP than the
United States of course all of these
things could end up happening in the
long term and frankly they probably will
uh so now the question is what do you do
about it all and does it matter well my
opinion the answer is it doesn't matter
the reason it doesn't matter what's
going on with the pet doll whatever else
is you shouldn't be exposed to the
dollar anyway in my opinion one of the
best things that we can do is just get
out of exposure from dollars and get
into assets assets which would be things
like real estate or stock exposure or
for some folks those are cryptocurrency
exposures in other words we don't
actually need to be exposed to the
dollar at all we can transact with the
dollar and then get our butts out of it
so to speak in that case you're not
exposed to the risks of a law a dollar
that's losing its PCH purchasing power
now is it possible that in the future
the United States becomes something like
the British Empire where we're much less
relevant than uh we used to be right
British Empire now the United Kingdom
much less relevant than the British
Empire was uh sort of like the Roman
Empire they all sort of die at some
point in the future anyway at some point
the United States dominance is going to
wear away but is this really anything
more than a partnership
amongst others to counterbalance the big
Partnerships we have now not really now
of course why is the topic then of
dollarization so popular well it's
popular because it in my opinion
represents this growing discontent
amongst Americans who fear that America
is losing its exceptionalism could be
because of unaffordable housing uh lost
faith in the Federal Reserve frustration
over crime borders uh political uh you
know polarization on social media
practically a growing bricks sort of
deepens tensions potentially between
bricks and the United States and sort of
Western allies and I think this is why
Saudi Arabia is on the more cautious
side of like oh yeah I'm going to go all
in and join bricks because they realize
like a vote for bricks is sort of a vote
against the United States so you've got
some folks here suggesting hey you know
okay like maybe maybe you don't want to
blow this up so quickly because the US
is still pretty
dominant but again how much does this
really matter long term in my opinion
not terribly much in my opinion for
right now the focus continues to be
build assets build your exposure to real
estate assets consider investing in
things like what I talk about in the
courses on building your wealth where I
send stock Buy sell alerts uh when I see
a trend in the stock market not
guaranteed to make money but I always
send uh alerts when I see a trend or
spot a potential Trend uh uh real estate
zero to millionaire investing the uh
we've got Kathy Wood speaking at our
event this weekend we've got the
do-it-yourself uh property management
and ren Renovations course the gold
course on entrepreneurship and
productivity a lot of cool things to
choose from these are the sort of
Investments that I would make but Fring
over dollarization I don't think is the
best so this is my take I see it as a
growing slow moving trend but not
something that really creates a lot of
fear for me at this point anyway I'm
hedging myself anyway but just not being
exposed thank you so much for watching
and we'll see you in the next one
goodbye and good luck can not advertise
these things that you told us here I
feel like nobody else knows about this
we'll we'll try a little advertising and
see how it goes congratulations man you
have done so much people love you people
look up to you Kevin PA there financial
analyst and YouTuber meet Kevin always
great to get your
take even though I'm a licensed
financial adviser licensed real estate
broker and becoming stock broker this
video is not personalized advice for you
it is not tax legal or otherwise
personalized advice tailored to you this
video provides generalized perspective
information and commentary any third-
party content I show shall not be deemed
endorsed by me this video is not and
shall never be deemed reasonably
sufficient information for the purposes
of evaluating a security or investment
decision any links or promoted products
are either paid affiliations or products
or Services we may benefit from I also
personally operate an actively managed
ETF I may personally hold or otherwise
hold long or short positions in various
Securities potentially including those
mentioned in this video however I have
no relationship to any issuer other than
house act nor am I presently acting as a
market maker make sure if you're
considering investing in house Haack to
always read the PPM at house.com
浏览更多相关视频
BRICS and 20 Countries ditch US dollar: Is that Peak of De-dollarization?
The Fake Petrodollar Story - No, Saudi Arabia Didn’t Ditch the Dollar
Saudi Arabia Just DITCHED The US Dollar.
Saudi ends Petrodollar deal with US - In Depth Analysis | Saudi Arabia, US Oil Geopolitics Economy
Japan Sell off more than $60 Billion Treasury Holding: What's Going On?
Saudi Arabia Just Ditched The US Dollar (How This Affects You)
5.0 / 5 (0 votes)