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BRICS+: The Big Shft Is Coming
1373 sats \ 23 comments \ @TomK 27 Aug 2023 bitcoin
I am preparing a dossier about tjr energy markets for a client. Here is an excerpt that discusses the importance of the growing BRICS.
In recent years, the BRICS countries - Brazil, Russia, India, China, and South Africa - have been making significant strides in the global oil market. These emerging economies have expanded their presence and influence, reshaping the dynamics of the industry.
  1. Brazil: A Rising Player Brazil, with its vast offshore oil reserves, has become a major player in the oil market. The discovery of the pre-salt oil fields has positioned Brazil as one of the world's largest oil producers. This expansion has not only boosted Brazil's economy but has also given the country a stronger voice in global oil negotiations.
  2. Russia: A Dominant Force Russia has long been a key player in the oil market, and its expansion has further solidified its position. With its vast reserves and advanced extraction technologies, Russia has become one of the largest oil producers globally. The country's influence in the oil market has allowed it to shape global oil prices and exert geopolitical influence.
  3. India: A Growing Consumer India's expanding economy and growing population have led to an increased demand for oil. As one of the world's largest oil importers, India's presence in the oil market cannot be ignored. The country's energy needs have driven its engagement with oil-producing nations and have positioned India as a significant player in global oil trade.
  4. China: A Strategic Investor China's rapid economic growth has fueled its demand for oil, making it the world's largest oil importer. The country has strategically invested in oil-producing regions, securing its energy supply and influencing global oil prices. China's expanding presence in the oil market has transformed it into a major player with significant geopolitical implications.
  5. South Africa: A Developing Market While South Africa may not be a major oil producer, its inclusion in the BRICS group has given it a platform to engage with other oil-producing nations. South Africa's growing economy and energy needs have positioned it as a potential market for oil exporters. Its participation in the BRICS alliance strengthens its voice in global oil discussions.
Furthermore, the expansion of the BRICS group to include six new member states, including Saudi Arabia and Egypt, has important implications for the global economy and the US dollar. Here are some points to consider regarding the consequences for the US dollar:
  • The BRICS countries' increased presence in the oil market could lead to a shift in global oil trade dynamics, potentially impacting the US dollar's role as the dominant currency for oil transactions.
  • As BRICS countries strengthen their economic ties and reduce their reliance on the US dollar, there may be a gradual decrease in the demand for the US dollar in international trade settlements.
  • The BRICS countries' efforts to establish alternative financial institutions, such as the New Development Bank, could provide alternatives to the traditional dominance of the US dollar in global financial transactions.
In conclusion, the expansion of the BRICS countries in the oil market has brought about significant changes in the global energy landscape. Brazil, Russia, India, China, and South Africa, along with the new member states, including Saudi Arabia and Egypt, have emerged as key players, shaping global oil prices, influencing geopolitical dynamics, and potentially impacting the role of the US dollar in international trade.
More: Six New BRICS: Implications for Energy Trade - CSIS https://www.csis.org/analysis/six-new-brics-implications-energy-trade
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50 sats \ 5 replies \ @TheBTCManual 27 Aug 2023
Even if they have a hold of the energy market, what they do with that energy is another thing, can they produce finished goods the world wants? Having commodities is one thing but if you don't have the skill and infrastructure to enrich that into high-value items, then how do you expect to expand outside your little trading block?
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0 sats \ 4 replies \ @TomK OP 27 Aug 2023
The little trading block is growing faster than us/eu. And the russian economy changed since the Maidan plot. I think they will be well integrated even in the fast growing Indian economy. In absolute terms they surpassed the german GDP in Q2 for the first time
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50 sats \ 3 replies \ @TheBTCManual 27 Aug 2023
We can't just look at one growing figure and ignore others, both China and South Africa have massive youth unemployment problems, India and China are in a border dispute, South Africa and China have energy/grid issues, Russia got their war going, China is still on their Taiwan buzz, so who is going to protect the supply lines, and shipping? There are a lot of moving parts going on here
I think its a bit premature to judge it, I just think the media is blowing this thing up based on a few early stats and a few deals agreed
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0 sats \ 2 replies \ @TomK OP 27 Aug 2023
I know quite well about the econ figures of the Eurozone. It's in sharp decline and the Euro is falling off a cliff in international usage. Just to give You my point of view. In the end anything is a derivative of cheap and constant access to energy.
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0 sats \ 1 reply \ @TheBTCManual 27 Aug 2023
%100 on that I completely agree, the way I see it is the eurozone has had a long time to use cheap energy and build an industry on it to exploit that energy to at the levels they do, apart from China and maybe India a bit none of the BRICS nations are really manufacturing/enriching energy and commodities on a massive scale, they'll need to bring that Euro enrichment into their zones and that takes time
I do think the EU zone is shrinking based on many policy reasons but like you say cheap energy is the tide that lifts or sinks all ships.
I've seen some protectionist policies rolling out recently like South African oranges require additional operational costs before shipping to the EU so its competitive with Spanish exports
What's your take on EU with these higher interest rates combined with energy inflation, surely things are breaking if no easing is coming in
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0 sats \ 0 replies \ @TomK OP 27 Aug 2023
The Fed is killing the negative yield spread between us and ger giv bonds. Inflation will be climbing like You said and this could initiate a capital movement that kills the money printer. In addition Niger is cutting France (and Germany) off a big amount of uranium. I think they soon will be in panic mode. Wait for the cold season.
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0 sats \ 5 replies \ @PlebeiusG 27 Aug 2023
How much of this post was made with AI?
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0 sats \ 0 replies \ @TomK OP 27 Aug 2023
O. But I sometimes need a translator. I a getman journalist, working in german with horrible english.
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0 sats \ 3 replies \ @nemo 27 Aug 2023
deleted by author
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21 sats \ 0 replies \ @TomK OP 27 Aug 2023
Honestly, I sometimes need help for translation if it's too complex. My spanish is waaaay better than my horrible english. These texts are part of my work for different clients.
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0 sats \ 1 reply \ @PlebeiusG 28 Aug 2023
No disrespect. My AI outputs are formatted much the same, so I may be thinking I recognize the format output. I think using AI is great, as long as usage is disclosed appropriately.
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0 sats \ 0 replies \ @TomK OP 28 Aug 2023
It's translated with DeepL. The articles are part of german magazines and papers I regularly prepare. It's a normal typo.
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0 sats \ 3 replies \ @iguano 27 Aug 2023
Are we sure we going to have a better world with countries like China, Russia, and India on the lead?
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0 sats \ 0 replies \ @guts 28 Aug 2023
It's the same with the WEF and west allies.
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0 sats \ 1 reply \ @TomK OP 27 Aug 2023
Clearly not. But we need to transform our societies in free market capitalistic ones. If we follow the Davos crowd it's game over with CBDC and commie control.
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0 sats \ 0 replies \ @iguano 27 Aug 2023
100% the thing is Countries like Russia, China, India, Saudi Arabia, etc, are more inclined to control their population.
But I agree, we are not living a real capitalism. All the countries have communist mindset.
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0 sats \ 6 replies \ @mallardshead 27 Aug 2023
Less about oil and more a rant on the BRICS themselves and currency:
None of the BRICS nations like one another and carry a list of grievances. And besides China and Russia, who have terrible demographics and rising costs of capital, none of them wants a new BRICs currency. All the BRICS speak different languages and share no common culture. None of them are relevant in Forex and never will be. 4/5 current BRICS country leaders will be past the statistical age of death at the start of next decade. The entire concept of globalization is based on the American security order. And that oil thing...
The whole purpose of the US dumping gold was that the petrodollar was a much better commodity-vehicle for monetary expansion. Any expansion of energy was necessarily an expansion of the USD. For over 50 years the US enjoyed this and its tiered benefits with few negative effects. The problem however, is that this requires oil and fossil fuels to be the fastest expanding forms of energy in peacetime, if it's going to benefit your currency, economy, bond market, deficits. Green energy is now the fastest expanding form of energy in peacetime, and the petrodollar is dying. Bitcoin uses electricity. So for the BRICS to try playing this petrol game this late, is pure folly. On the issue of a gold-tied or gold-pegged currency, it'll never happen. If BRICS are that stupid, they'll get destroyed by US/Allies who set up a London Gold Pool 2.0 and wreck the monetary premium. Too, if the market cap of gold gets flipped by the market cap of bitcoin, they'll have a weaker commodity and weaker money tied into a declining form of energy. The BTC/USD pair isn't something they can compete with. The petrodollar's death is dangerous for theocratic monarchies of the middle-east who are afraid their security guarantor (the US) will leave. That's what their casual BRICS membership is about, but they know it won't work.
Russia will go hyper-inflationary and implode this decade. China will implode by next decade. South Africa is irrelevant and doesn't need BRICS, they need water. Brazil's GDP has been declining steadily since 2011, and they've never traded with any BRICS nation other than exports to China. India is a classic non-aligned power and couldn't care less who they trade with. And if the BRICS do expand their membership, it'll ensure they never accomplish anything.
Twitterverse and podcasts are really running with this BRICS bullshit.

BRICS: vaporware.

Will BRICs last longer than League of Nations did?
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126 sats \ 5 replies \ @TomK OP 27 Aug 2023
I think You hit the point: energy as colareral of future currency systems. And now ask Yourself if we know that 6 of the 9 largest oil and gas producing nations belong to the BRICS+: How can Europe for example defend its econ model? And what happens to the EU's and US' debt that spiraling like never before?
''Russia will go hyper-inflationary and implode this decade.'' - never gonna happen. Russia is the commodity hub of the world with just 25% debt/GDP.
To me their will be more than just a shift. It's redifining geopolitics.
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0 sats \ 4 replies \ @mallardshead 27 Aug 2023
Russia thought they had the grand plan of holding Europe's economy hostage via energy. It failed. Oil and natgas are cheaper than they were before the war started, which is terrible for Russia, with the double-whammy that now Russia's biggest enemy (the US) is selling energy to its allies for more money than Russia was. What's crazier is that the US defense budget has been falling for years.
When you create any significant disruption, incentives to find a way around them start building, and Europe isn't a third world country with third world allies. Russia has foolishly sped up their energy transition by many years. Russia had a great thing going. It doesn't mater what commodities Russia has, what matters is they continue pulling these resources for directionally cheaper prices, and have the logistics to deliver them. Their demographics and cost of capital were disastrous before the war started. And the equipment and technology for most of their industry aren't things they produce, which is why we've even seen them steal tractors from rural farmers in the United Kingdom. Venezuela has the largest proven oil reserves in the world and have hyper-inflated. If Putin isn't replaced, and the country isn't opened for investment, Russia's Ruble will hyper-inflate. The country will implode. Their resources and power vacuum will be fought over. They'll become a subsidiary of China or destabilized enough that someone has to secure their nukes.
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210 sats \ 2 replies \ @TomK OP 27 Aug 2023
Well, I take exactly the opposite site. Russia has clearly escaped from the sanction-shock and is integrating economically in the new trading space. Europe is clearly in fast decline. To me the US are in a better position than Europe but the USD (and its derivatives like T-Bills) is losing continually (still dominant, I know) it's role as reserve asset and trade vehicle. A demogr. collapsing China could be the factor that will be tearing down this construct in the future. But Russia as no. 1 commodity producer in the world brings the biggest stash of collateral to the table. That's why England tried to crush it over centuries...
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0 sats \ 1 reply \ @mallardshead 27 Aug 2023
Ok touché, the last part especially. My final argument then we'll have to agree to disagree.
Lot's of smart money view Ukraine as an opportunity like the rebuild of Japan from 1945-1952; where it rapidly afterwards became the world's second largest economy, even after most cities were firebombed to ash, and there was a double nuking event. The ReBuild Ukraine conference in Poland earlier this year was so well-attended (by the well-to-do), that they're doing another one this November. And Ukraine bonds have been one of the hottest investments for awhile now:
https://www.bloomberg.com/news/articles/2023-06-27/morgan-stanley-bet-on-ukraine-s-debt-returns-47-in-three-months
The design pattern of the war the US has put on Russia is nasty from what I've observed and concluded, which is this:
The US has a falling military budget. And for a drop in the bucket of that budget, they get to dramatically weaken an enemy, while selling energy to allies for more money than our enemy did, while putting a resource rich country (Ukraine) in debt, and losing no men. It's the smartest war ever fought.
It's really the MASSIVE natural resources of Ukraine that are most interesting, especially to Russia, who will lose what they've sampled heretofore.
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0 sats \ 0 replies \ @TomK OP 27 Aug 2023
With respect to Ukraine: my impression is that Ukraine ( with Nato in the back) is being grinded by the well-established russian defense line. There is a recruiting problem and first nato members are trying to find a way out of this. Today Italy commented via its former PM Conte that ''Nato strategy is failing'' and sanctions are back-firing to the Europeans. Russia won't leave Crimea or Donbass, that's over. And I think Putin is bleeding the Zelensky regime out to negotiate with another group of representatives on the future of the country, nato presence and the exploitation of the massive gas fields in the black sea (which is all about in my opinion). Let's see how it's playing out. Winter is coming...
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0 sats \ 0 replies \ @TomK OP 27 Aug 2023
Here You can see the slow but steady decline of the USD in its role as a reserve currency. Bad graphic by putting the chinese shitcoin with another scale into, but ignore this for our purpose: https://twitter.com/Sorenthek/status/1695626791782650011?t=lWvfJ3qSP3FtFKzTDXwtFA&s=19
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