US caused BRICS? If Saudi Arabia fully joins, could that kill the petrodollar?

BRICS header photo https://twitter.com/brics_cci/header_photo

The USA-UK dominated world order is being pushed aside. In addition to the goals of the European Union (which no longer includes the UK), there is the growing BRICS alliance. Originally consisting of Brazil, Russia, India, China and South Africa (hence BRICS), more nations have joined and more wish to become part of this alliance.

As for reason why, here is a view from China:

How America ended up creating the adversarial Brics of today

What began as a newfangled investment theme for emerging economies now holds hope for those trying to flee US financial coercion and abuse

January 1, 2025

If Donald Trump is Tariff Man, Joe Biden was Sanctions Man. By virtue of owning the world’s biggest economy and the almighty dollar, the United States has long exploited both superpowers to its advantage. …

Since the September 11 terrorist attacks, America’s economic exploitation has increasingly turned into economic coercion and abuse against foes and sometimes even friends.

First deployed as a tool of the “war on terror”, the US discovered an all powerful toy – its ability to monitor vast troves of financial data in real time to track the trade and money transfers of almost everyone, not just suspected terrorists. …

And they don’t have to be criminals, terrorists or rogue states; they just need to be enemies or unfriendly entities. In some cases, even friends and allies are not exempt.

Swift, for example, is supposed to be a neutral global financial messaging and payment network. But Washington has abused its dollar dominance as a currency of exchange to turn the platform into a powerful surveillance system to check on who’s paying or trading with whom.

In effect, by paying Swift for its services, financial institutions and government agencies around the world are subsidising Washington to monitor and punish them.

And since everyone needs US dollars to transact at some point, they are all at its mercy.

That’s one reason – not the only but surely a very big one – that Brics membership is expanding so quickly, …

all are afraid of, and want to hedge against, America’s financial dominance.

The more US leaders such as Biden and Trump abuse US powers, the more attractive Brics becomes. https://www.scmp.com/opinion/article/3293041/how-america-ended-creating-adversarial-brics-today

I have long warned that USA sanctions would have negative consequences.

The BRICS nations see the USA debt risk and despise USA sanction policies. They clearly want to topple the dominance of the US and its dollar (as do the Europeans, which is part of why they came out with the Euro).

While not currently a formal member of BRICS, Saudi Arabia has expressed at least some interest:

Are the BRICS gearing up to challenge the petrodollar?

Recently reported remarks by a senior Saudi official that the Kingdom might be receptive to using the Chinese currency for crude oil settlements raised the prospect of a possible increase in non-dollar oil trade between the Kingdom and other Gulf Arab oil producers. …Talk of so-called de-dollarization in favor of the Chinese currency gained traction after the UAE and Saudi Arabia were invited to join the BRICS, an intergovernmental organization set up by Brazil, Russia, India, and China as a counterweight to the mainly Western industrial powers.

To date, only Abu Dhabi has joined formally, while Riyadh has not yet taken the final step to join. 10/10/24 https://economymiddleeast.com/news/are-the-brics-gearing-up-to-challenge-the-petrodollar/

In 2024, Saudi Arabia took a pivotal step by becoming an invitee of BRICS, marking a major move toward deepening economic and political ties with the world’s largest emerging economies – Brazil, Russia, India, China, and South Africa. This alignment with BRICS opens new avenues for Saudi Arabia to engage with alternative centers of power, fostering diversified international alliances and reducing reliance on the West. It also underscores the Kingdom’s commitment to a multipolar world order, where the interests of developing nations are valued alongside those of global superpowers, thereby strengthening Saudi Arabia’s standing as a prominent player on the international stage.

Saudi Arabia has taken a pause in the process of becoming a full BRICS member, reportedly due to having to complete unspecified “internal procedures”. The kingdom participates in the group’s activities that are of interest to Riyadh, but refrains from taking part in drawing up joint documents or decision-making. …

BRICS membership provides Saudi Arabia with additional opportunities to diversify its economy. The Kingdom can leverage the BRICS platform to attract investment in high-tech sectors such as information technology, healthcare, and renewable energy. For instance, collaboration with Brazil and Russia in the agricultural sector can enhance food security, while technological exchanges with China may accelerate Saudi Arabia’s shift toward sustainable energy sources. …

Saudi Arabia’s alignment with BRICS marks a significant milestone, not only strengthening the bloc’s position but also enabling it to evolve into a more versatile and influential global force. Traditionally seen as a counterbalance to Western economic blocs, BRICS has, in recent years, sought to expand and deepen its ties with the Global South and the Islamic world. Saudi Arabia’s membership is a major step in this direction, offering economic and political advantages that benefit the entire organization.

From an economic perspective, Saudi Arabia brings new dimensions to BRICS in terms of energy security and independence. As the world’s largest oil exporter and a key OPEC leader, Saudi Arabia accounts for around 12% of global oil exports. 12/31/24 https://www.rt.com/news/610230-saudi-arabia-brics-potential/

What is the petrodollar?

Essentially, it is the fact that although the US dollar is no longer backed by gold, since most oil is priced in US dollars, that gives the US dollar a backing through a needed commodity. This insures that, internationally, the US dollar will have value. So it is sometimes called a petrodollar.

Here is more about that:

After the collapse of the Bretton Woods gold standard in the early 1970s, the U.S. struck a deal with Saudi Arabia to standardize oil prices in dollar terms. Through this deal, the petrodollar system was born, along with a paradigm shift away from pegged exchanged rates and gold-backed currencies to non-backed, floating rate regimes.

The petrodollar system elevated the U.S. dollar to the world’s reserve currency and through this status, the U.S. is able to enjoy persistent trade deficits, and become a global economic hegemony. The petrodollar system also provides the United States’ financial markets with a source of liquidity and foreign capital inflows through petrodollar “recycling.” However, before the effects of the petrodollars on the U.S. dollar can be examined, a brief history lesson is in order. …

Since the most sought after commodity in the world–oil–is priced in U.S. dollars, the petrodollar helped elevated the greenback as the world’s dominant currency. In fact, according to the Bank for International Settlements (BIS) triennial survey, 87 percent of all foreign exchanges deals initiated in April 2013, involved the USD on one side. With this status, the U.S. dollar was able to enjoy, what some have asserted to be an “exorbitant privilege” of perpetually financing its current account deficit by issuing dollar denominated assets at very low rates of interest, as well as, becoming a global economic hegemony.

For instance, countries like China, who hold vast quantities of U.S. debt have voiced their concerns in the past about the possible dilutive effects to their asset holdings should the dollar depreciate. However, the privileges associated with being able to run persistent current account deficits come at a price. As the reserve currency, the U.S. is obligated to run these deficits to fulfill reserve requirements in an ever in an ever-expanding global economy. If the United States were to stop running these deficits, the resulting shortage of liquidity can pull the world into an economic contraction. However, if the persistent deficits continued ad infinitum, eventually foreign countries will begin to doubt the valuation of the dollar and the greenback may lose its role as the reserve currency; this is known as the Triffin Dilemma. http://www.investopedia.com/articles/forex/072915/how-petrodollars-affect-us-dollar.asp#ixzz4iqqtZ9CU accessed 06/02/17

If enough oil producing nations stop pricing oil in US dollars, the theory is that the US dollar will drop, or even collapse.

Now, Donald Trump does not want the BRICS+ alliance to officially move away from the US dollar and has made threats:

Trump’s threats won’t hold back Brics push to de-dollarise

30 December 2024

“We require a commitment from these countries that they will neither create a new Brics currency nor back any other currency to replace the mighty US dollar, or they will face 100 per cent tariffs and should expect to say goodbye to selling into the wonderful US economy,” Donald Trump warned late last month, referring to a push by some members of the grouping to create a new payment system for their expanding trade. …

Anticipating a new round of trade wars and disruptive policies under a second Trump administration, Brics is likely to intensify trade and strategic cooperation among its member-states to de-risk from the US’ strategic excesses. …

Rising powers such as Turkey, Vietnam, Indonesia, Saudi Arabia and Malaysia have also shown interest in joining the grouping. Although “Brics plus”, comprising its members and partner countries, is still largely a talk shop among non-Western nations, Trump’s disruptive policies will inevitably strengthen the resolve among emerging powers to de-risk from America’s unilateral excesses. …

Major Brics economies are also set to double down on trade and strategic cooperation among one another, …

Despite its manifold deficiencies, Brics is likely to serve as a locus of anti-Trump resistance and a springboard for the creation of a more multipolar international order. The US and its currency may seem invincible today, but, as Hemingway once famously said, one becomes bankrupt “gradually, then suddenly”. https://www.scmp.com/opinion/world-opinion/article/3292754/trumps-threats-wont-hold-back-brics-push-de-dollarise

Regarding Donald Trump’s threat against BRICS, a month ago I posted the following:

As I have long warned, the use of financial pressures and sanctions has a cost to the US and its dollar (watch US Sanctions and Tariffs leading to New World Order?).

While the US continues to act like it can dictate financial and other terms on most nations in the world, there is growing resentment.

Donald Trump’s threats of high tariffs will tend to move many nations closer together and farther from the USA.

As various reports related to this last and other BRICS’ summits confirm, that group continues to take steps to dethrone the US dollar.

Let me add that although the European Union is not part of BRICS+ at this time, part of the reason to develop the Euro was to bypass the need for the US dollar in trade. And that really did accomplish that across much of Europe. …

Donald Trump’s threats will have unintended consequences, but will not stop the coming end of USA dollar dominance.(Thiel B. Donald Trumps threatens BRICS nations with 100% tariffs–there will be unintended consequences. COGwriter, December 1, 2024)

Related to BRICS and the USA dollar, notice the following which is in my book Lost Tribes and Prophecies: What will happen to Australia, the British Isles, Canada, Europe, New Zealand and the United States of America?:

Those in Iran and some of the Arab lands, along with nations such as Brazil, China, and India have discussed plans for the removal of the dominance of the U.S.A. in global trade as well. The former (again current) President of Brazil, Luiz Inácio Lula da Silva, even claimed that eliminating the U.S. dollar’s reserve currency status was one of the reasons that the BRICS alliance (Brazil, Russia, India, China, and South Africa) was formed in the first place. [i] Others have noted that bypassing the USA dollar is still an object of BRICS—and officially BRICS nations “are currently working on setting up a new global reserve currency,”[ii] which may have gold-backing.[iii] The expansion of BRICS (which is in progress) may ultimately even hurt Australian trade as well as “severely weaken primacy of the US Dollar as an international currency.”[iv]

The Bible clearly warns against cheapening the money supply and encourages having money hold its value (Proverbs 25:4 Isaiah 1:25, Ezekiel 22:18-22). Debt is also warned against (Habakkuk 2:6-8). Yet policies enacted under the Obama, Trump, and Biden Administrations, following certain other administrations, have ignored these warnings.

[i] Escobar P. BRICS was created as a tool of attack: Lula. Asia Times, August 28, 2019

[ii] BRICS developing new global reserve currency – Putin. RT, June 22, 2022

[iii] Helms K. Economists Discuss Russia, China Potentially Developing Gold-Backed Currency. BRICS Information Portal, November 11, 2022

[iv]Hunter M. BRICS Is Becoming The Big Kid On The Block: Implications For Australia – Analysis. Eurasia Review, November 1, 2022

One day the US dollar will be toppled–but that will not fully happen in 2025. But let me add that the Bible teaches that a coming European power will accumulate gold too (cf. Daniel 11:38,43; see also The Plain Truth About Gold in Prophecy. How Should a Christian View Gold?).

Based upon several biblical prophecies, I have long written that the Asians and Europeans will cooperate, for a time, and eliminate the USA and its Anglo-Saxon descended allies. They will divide their lands among them per Daniel 11:39, and many of the survivors will be made slaves (for more details check out the article Will the Anglo-Saxon Nations be Divided and Have People Taken as Slaves?).

It should be added that part of the purpose of the Euro was to bypass the USA dollar for international trade. And, that has happened completely within the Eurozone block in the EU.

Steps towards pushing away the Anglo-American dominance of the world for the past couple of centuries is happening.

Although BRICS will not dominate the world economically like the coming European Beast power will, the BRICS nations and their actions will have major impacts on the world.

Related to BRICS and the USA dollar, we put together the following video:

14:31

BRICS Push Aside USA Dollar

The BRICS nations (Brazil, Russia, India, China, and South Africa) have as one of their founding goals, to eliminate the need to use USA dollars in cross-border trade. Six additional nations have been invited to join BRICS in 2024, and India reports that six more are also being looked at. The BRICS nations have already began to drop the USA dollar for some cross-border trading with Russia and China indicating that they had almost done so completely in late 2023. What will happen to the economy and value of the USA dollar if more and more nations stop using it as a primary reserve and trading currency? What about hyperinflation? Does the Bible prophesy destruction for a highly indented nation in the end time? Is the USA the most indebted nation of all time? What about the intent and use of the Euro? Will Europe and Asia cooperate to eliminate the USA and its British-descended allies?