At present, there are two kinds of war being fought at the global stage. The first is a financial war between the US and BRICS+ and the second regional wars between Russia and NATO over Ukraine, and Israel and its allies against Hamas, the Houthis and Hezbollah backed by Iran. Indeed, the financial and regional wars are deeply interconnected. Actions must be considered against the backdrop of past play in both the financial and regional wars and has consequences which effect both. We will consider the implications of the current state of play and identify some possible developments and their corollaries for global markets.
The prospect of de-dollarisation has been simmering for some time with no notable avail; promises in Argentina and past BRICS+ developments have come up short. Now BRICS+ is likely to unveil plans of a gold backed inter-state payment and investment structure soon. This perhaps explains why the Chinese have been buying so much gold and why the price of gold has risen sharply. Such a structure will harness a public digital platform which aggregates BRICS+ central banks digital currencies with each nation’s means of financial messaging. Whether this takes the form of BRICS pay as seen by the public or some sleeker form will be seen not long from now.
The success of such a platform would seem the first important step in a long process of dedollarisation, something we believe is one of the central themes over the next 5-10 years. The reduction in global reliance on the US dollar and in turn reduction in its demand has wide ranging consequences which will be explored in coming pieces. At play is the security of American Hegemony and perhaps the dominance of the US economic empire at a whole.
Turning to the regional wars. For the US in its alliance with Israel, the main concern is to retain control over the energy and fertiliser resources of the world. The petro-dollar trade has been threatened over the last year, with talk over oil settlement in Yuan growing. Indeed 1 million barrels of crude was purchased in digital Yuan on the SHPGX in late 2023, a significant development in the shifting tides of dollar dominance in the oil trade...
...