South Africa’s minister of international relations and cooperation, Naledi Pandor

The BRICS group of nations will debate the feasibility of introducing a common currency for global trade as an alternative to the US dollar at the bloc’s next summit in Johannesburg, Bloomberg has reported, citing South Africa’s minister of international relations and cooperation.

“It’s a matter we must discuss and discuss properly,” Naledi Pandor said in an interview in Cape Town on Tuesday.

Talk of de-dollarization has emerged from governments keen to reduce reliance on the US currency. The dollar has increased in value due to US interest rate hikes as well as geopolitical conflicts that have negatively impacted most emerging markets.

According to Pandor, BRICS nations and other countries are questioning why they are “committed to trading through the dollar” and can’t use their own currencies instead. The BRICS group comprises Brazil, Russia, India, China, and South Africa.

“South Africa has an internationally traded currency,” Pandor said, but cautioned that her country also holds significant debt in dollars, “so you know we have to approach this discussion responsibly.”

The minister warned that de-dollarization would be complex and that there would be no guarantee of success.

“I don’t think we should always assume the idea will work, because economics is very difficult and you have to have regard to all countries, especially in a situation of low growth when you are emerging from crises,” Pandor told Bloomberg.

The BRICS group makes up 40% of the world’s population and almost a third of the global economy. According to estimates provided by the South African government, the bloc brings together about 3.2 billion people.

Last month, 19 countries reportedly expressed interest in joining the BRICS group, which is gearing up to hold its 15th annual summit in South Africa from August 22 to 24. The United Arab Emirates, Argentina, Algeria, Egypt, Bahrain, Indonesia, Saudi Arabia, and Iran are among the countries that have formally asked to become members.

Over 14,000 people have died from gun violence so far this year, according to the White House press secretary.

The US has seen 201 mass shootings in the first 128 days of 2023, White House press secretary Karine Jean-Pierre claimed during a press briefing on Monday, citing “leading accounts.” Saturday’s massacre at an outlet mall in Allen, Texas, which left eight people dead and seven injured, allegedly marked the 201st mass shooting of the year.

Jean-Pierre’s mass shooting statistics appear to be sourced from the Gun Violence Archive, which defines a mass shooting as an incident in which a “minimum of four victims are shot, either injured or killed, not including any shooter who may also have been killed or injured in the incident.”

Deaths by suicide comprise the majority – 57% – of the 14,836 gun deaths recorded by the Gun Violence Archive for 2023, with about 66 of the 115 gun deaths recorded per day being suicides. By the Archive’s definition, the number of mass shootings actually declined from 690 in 2021 to 647 last year.

The FBI typically defines a mass shooting as one in which four or more people are killed. By that definition, there have been about 21 this year. According to the FBI, the number of “active shooter” incidents in the US declined in 2022 compared to 2021, falling from 61 to 50. While the total number of people shot increased from 243 to 313, the number killed declined from 103 to 100.

Authored by Ekaterina Blinova,

De-dollarization is heading for a breakthrough due to rising global discontent with US ‘casino capitalism’…

“It’s a gigantic snowball all over the world. We cannot even keep up with it,” Pepe Escobar said in an interview with the New Rules podcast.

“It’s very important what is going to be discussed at the BRICS summit in South Africa. This will probably be the crossroads moment where things are going to then go.”

Escobar explained that a growing number of countries in the Global South were doing the math and concluding that the US dollar was not a safe bet. The combination of aggressive US sanctions policy and reckless government spending have dramatically reduced the greenback’s international appeal.

“If you want to analyze the patterns these past two decades, you need to understand the fact that, if you are rich in commodities and if you are a productive capitalist nation and you decide to issue a currency, it will be internationally respected because people will know it’s based on facts, actual provenance, actual wealth,” he said. “That’s contrary to the system that we have now, which I have been calling it ‘casino capitalism’ for years. It’s futures, it’s bets, it’s suppositions. It may go right or wrong. If you lose, you lose it all. The house mostly always wins because the house is the one who prints the currency. It’s backed by nothing, literally, by a country that owes $30 trillion [in national debt] now and it will never be able to repay it.”

To make matters even worse, the US Federal Reserve’s aggressive interest rate hikes has made borrowing in dollars expensive for almost everyone in the world. Prior to the Fed’s move, Kristalina Georgieva, managing director of the International Monetary Fund, warned in January 2022 that the US raising interest rates could backfire on the global economy and especially on countries with higher levels of dollar-denominated debt.

The ongoing US banking crisis threatens to further destabilize international financial markets. No country in the world wants to “catch a cold” when the US economy “sneezes,” as memories of the 2008 financial crisis linger.

“They say, ‘look, why do we have to be subjected to this kind of arrangement?’ And of course, before, as we all know, it was ‘the Empire of bases’, over 800 military bases all over the world, ‘the power of the financial markets’, ‘the power of soft culture’, ‘the power of cancel culture’, but the Global South is not intimidated anymore. I think this is the first [time] in this new millennium. We never had this before in the past two and a half centuries, at least,” Escobar said.

BRICS Seeking to Establish New Currency

In January 2023, BRICS – an acronym for Brazil, Russia, India, China, and South Africa – made a splash by announcing that it may soon explore the possibility of creating its own currency to by-pass the US dollar. The idea was articulated on both sides of the Atlantic: Russian Foreign Minister Sergey Lavrov touched upon the plan during a presser after his meeting with Angolan President Joao Lourenco on January 25.

On the other side of the pond, President of Brazil Luiz Inacio Lula da Silva discussed the issue of the creation of a common currency for BRICS and the countries of Mercosur, a South American trade bloc, during his meeting with his Argentine counterpart Alberto Fernandez.

“Why can’t an institution like the BRICS bank have a currency to finance trade relations between Brazil and China, between Brazil and all the other BRICS countries? Who decided that the dollar was the (trade) currency after the end of gold parity?” Lula said during an April visit to the Shanghai-based New Development Bank.

According to Escobar, the formation and development of three organizations, namely BRICS, the Shanghai Cooperation Organization (SCO) and the Eurasian Economic Union predetermined the end of the greenback-centered world order. BRICS members are now discussing designing an alternative currency; similar discussions are being held in the Eurasian Economic Union; they should start coordinating and then this will spill over to the SCO, the writer projected.

The trend has already been engulfing other blocs, Escobar continued, referring to the Association of Southeast Asian Nations (ASEAN). On March 28, ASEAN finance ministers and central bank governors held a meeting in Indonesia to discuss how to move to settlements in local currencies by further enhancing an ASEAN cross-border digital payment system.

Initially, the agreement on such transactions was reached between Indonesia, Malaysia, Singapore, the Philippines, and Thailand in November 2022. The association is seeking to reduce dependence not only on the US dollar, but also on euros, yens, and British pounds in financial transactions.

“We have something that was absolutely unbelievable two months ago,” Escobar emphasized.

Why is De-Dollarization Gaining Steam?

De-dollarization has been discussed for decades. For instance, Mikhail Khazin, a Russian economist and publicist, who served in the Working Center for Economic Reforms under the Boris Yeltsin government in the 1990s, and his co-author Andrey Kobyakov predicted the demise of the US dollar dominance roughly 20 years ago in their book titled “The Decline of the Dollar Empire and the End of Pax Americana.” While the idea has been in the air for quite a while, why is it that this phenomenon has only now started to gain critical mass?

“We can even establish a date for it,” responded Escobar. “February last year, with that freezing, confiscation, stealing of Russian foreign reserves. And the Global South as practically as a whole started asking themselves from Latin America to Africa to South East Asia, ‘if they can do this with a nuclear superpower, they can do it with any one of us snapping their fingers’. So that’s why the coordination inside these multilateral organizations and in other forums picked up astronomic speed.”

To illustrate his point, the journalist referred to the swift development of BRICS with a staggering 19 countries currently on the list to join the organization. Among them the strongest candidates are Iran, Argentina, Algeria, as well as the United Arab Emirates, Turkiye, Egypt, Kazakhstan, and Indonesia, as per the geopolitical analyst.

“So these are all strong middle rank powers from anywhere,” Escobar said. “And they’re going to start discussing the now notorious BRICS alternative currency. So they have to speed up this conversation and let’s hope that they are going to start discussing it in conjunction with the Eurasian Economic Union, which is much more advanced, and the Shanghai Cooperation Organization.”

Escobar believes that nothing short of a breakthrough in this respect could occur as early as next year.

“It’s possible, it’s a feasible scenario,” he insisted. “Until a few months ago, this would be the ultra-far-fetched scenario. Not anymore, because now the speed is unbelievable. Literally every day – Bangladesh, Argentina, Algeria, countries in Southeast Asia.”

Last month, Russian Foreign Minister Sergey Lavrov met with his Bolivian counterpart Rogelio Mayta in the Venezuelan capital Caracas and introduced a new trade transaction system to drop the US dollar and the euro and switch to rubles and Bolivianos instead.

Together with Argentina and Chile, Bolivia forms the so-called “Lithium Triangle” which accounts for more than half of the world’s deposits of the silvery-white alkali metal. Bolivia’s Salar de Uyuni salt flat alone contains 21 million metric tons of lithium, widely used in rechargeable batteries for mobile phones, laptops, digital cameras and electric vehicles.

Petroyuan May Dethrone Petrodollar

The most important element is the coming of the petroyuan, as per Escobar. For decades, crude oil has been traded in US dollars. However, the petrodollar could be soon dethroned: last year, Beijing called on Gulf leaders to settle their gas and oil deals with China in yuan. The US and China remain the world’s top two consumers of crude, using 18.7 million and 15.4 million barrels per day, respectively. Energy settlements in yuan could deal a heavy blow to the greenback.

“We are on our way, which is something that even very good American financial analysts who have been following this story could never imagine that this would be literally around the corner,” the journalist said. “Now, the only thing that is missing, in fact, is the Chinese delegation going to Riyadh and saying, ‘okay, from now on everything is going to be in yuan, no more Western currencies anymore.’ And we already have a mechanism for it. I did a column about that, basically explaining that it’s a very simple mechanism.”

“You buy oil futures at the Shanghai Exchange priced in yuan. So from now on you have a new benchmark, an oil benchmark in yuan that you transact in Shanghai. The Chinese say, ‘look, it’s linked to gold as well. You want to change yuan into gold? Simple. We have a gold exchange here in Shanghai and we have another one here in Hong Kong. You can trade all you want for gold.’ This is the way. It’s extremely simple. But not many people are aware of it. Only a few economists, in fact. And I have not seen this discussion in American media, for that matter,” Escobar continued.

That doesn’t mean, however, that the dollar will be replaced by the yuan: instead, a whole set of currencies will be used wiping out the greenback’s hegemony, according to the geopolitical analyst.

“I think we’re going to start with having multiple replacements, and then maybe in the second stage, these multilateral organizations start thinking, okay, why don’t we think about a fusion? Because we have different priorities,” he said.

by Ilya Tsukanov via Sputnik Globe

The spectacle in Washington over the debt ceiling (i.e. restrictions on how much the government is allowed to borrow), has pushed the White House to claim America’s adversaries are rubbing their hands in anticipation of a US default. But in a globalized world, the US defaulting on its obligations threatens to take the rest of the planet with it.

President Biden has launched a charm offensive aimed at Congressional Republicans amid the debt ceiling crunch, hailing GOP House leader Kevin McCarthy as an “honest man” while patting himself on the back as a leader with “a hell of a lot of wisdom” and as someone who “know[s] more than the vast majority of people.”

Senate Minority Leader Mitch McConnell signaled to the White House that he’s ready to play hard ball, signing a letter together with over 40 of his GOP colleagues addressed to Democratic Senate Majority Leader Chuck Schumer warning that Republicans would not support “any bill that raises the debt ceiling without substantive spending and budget reforms.”

McConnell and McCarthy want deep cuts – including trillions in spending gone from the budget over the next decade on a range of programs, including hundreds of billions from Biden’s lavish climate agenda.

The US federal government is projected to run out of money and default on its debt as soon as June 1, with Treasury Secretary Janet Yellen urging lawmakers to get their act together before plunging the country into economic turmoil.

Biden has taken aim at the GOP and MAGA Republicans in particular over the debt ceiling deadlock, accusing them of pushing a “manufactured crisis” and throwing shade on his good jobs statistics. “Let’s get it straight: They’re trying to hold the debt hostage for us to agree to some draconian cuts, magnificently difficult and damaging cuts. But unfortunately, they’re threatening to undo all this progress by letting us default,” he said Friday.

America’s budget deficit ballooned by more than $1.1 trillion in the first half of fiscal year 2023, $430 billion above what it was during the same period in 2022. The US hasn’t run a budget surplus since 2001. The failure to match revenue and spending has led to a ballooning of the national debt, from about $3 trillion in 1989 to over $31.7 trillion today – with the debt jumping by about $15 trillion in the past decade alone. Total debt – which includes the national debt plus state, local and individual obligations, has surpassed $96 trillion – less than 10 trillion shy of the world’s entire gross domestic product of $103.8 trillion in 2022.

US Economic Collapse: World Would Reap What America Sows

The Biden administration has sought to distract Americans from the gargantuan debt bubble caused by decades of spendthrift government policy by using the “R”-word. On Thursday, White House Office of Management and Budget Director Shalanda Young told reporters that she agrees wholeheartedly with Director of National Intelligence chief Avril Haines’ assessment that Russia and China would love for the US to default and throw the economy into chaos.

“This – this is – this just gives to our global competitor. They love this. They love to see chaos in the American system. They love to see that we can’t do our basic jobs. It’s no less than a test of what works in this world. Does democracy still work or does the Chinese way work?” the official asked.

But the real “test” may be just how well the rest of the world will be able to manage the fallout of a US debt crisis and financial collapse.

In 1929, a market crash on Wall Street triggered a global depression that affected most of the planet and ultimately culminated in the Second World War. Eighty years later, another US market crash triggered a global “Great Recession,” shaving trillions off US and global economic growth and depriving an entire generation of young people entering the workforce of decent jobs – with many workers, both young and old, subsequently dropping out of the labor market.

China, Russia, and other BRICS economies have done their best to prepare for another US economic collapse, ramping up economic cooperation, forging new banking agreements, and making efforts to reduce dependents on the petrodollar, US technology, and escape the control of US-controlled financial institutions.

But this process remains incomplete. As some observers have pointed out, a US default would be “devastating” for global markets, undermining faith in the US financial system – the second largest in the world after China by total banking sector assets, and potentially triggering a domino effect.

The contagion of a steep US economic decline would to quickly spread to the economies of America’s allies and client states, as well as major trade partners in Asia and the Middle East – some of which are seeking independence from Washington, but continue to rely on its massive economy (US-China trade reached over $690 billion in 2022 despite tensions, for example), and the dollar.

While the US’ global share of world economic output has dropped from 32 percent in 1980 to 24 percent in 2020, and its share of global trade fell from 14 to 11 percent over the same period, the dollar remains the go-to instrument of international exchange, accounting for about 59 percent of foreign central banks’ holdings, and 74 to 96 percent of all trade in the world, depending on region.

Unsustainable Model

Washington’s spendthrift economic policy and debt-accumulating policy threatens both the United States and the rest of the world, but with no political accountability, there’s no easy solution to the problem.

“Even if Congress manages to raise the debt ceiling before anything so dire happens, its flirtation with disaster serves as a warning about the deterioration of America’s fiscal health and the difficulty of recovering it,” one European business publication pointed out.

The nub of the issue, according to former Congressional Budget Office chief Doug Elmendorf, is that neither of the major parties are willing to sacrifice popular support to make painful, but necessary reforms that could resolve the debt issue – with Republicans averse to cutting entitlements, while Democrats avoid raising taxes.

“Both those positions are obviously politically popular, but they take off the table the biggest pieces of the federal budget. So it’s increasingly hard for either party to develop a plan that puts fiscal policy on a sustainable path, much less agree on a set of policies,” Elmendorf said.

“The core measure of vulnerability is not, in the first instance, America’s debt level but rather its ballooning fiscal deficit,” British business media noted. Pointing to projections of the budget deficit averaging 7-8 percent over the next decade, the outlet pointed out that back-to-back-to-back deficits years on end will result in the national debt ballooning up to 250 percent of GDP by 2050 (it’s already 123 percent now).

Free Accounting Advice

Another factor, not accounted for by most US officials and economists, but undoubtedly playing a key role in America’s debt crisis, is Washington’s foreign policy – with the military-industrial complex, which consumes over 12 percent of federal spending and nearly half of discretionary spending, kicked into overdrive over the past two decades of empire-building in Europe, Afghanistan, and the Middle East. It’s no big mystery why the Clinton administration was able to run modest budget surpluses of 0.8-1.2 percent between 1998 and 2001, given that the end of the Cold War in 1991 allowed the nation to enjoy an unprecedented “peace dividend” stemming from the lack of the need to pamper the MIC and fund costly military adventurism abroad.

Unfortunately, the current administration seems unlikely to turn to non-interventionism to run down the debt and deficit. Instead, it seems to be bent on simultaneously fueling conflicts with adversaries ranging from Russia and China to Iran and North Korea – with all of these crisis centers requiring money – and a lot of it.

The biggest danger facing the planet may very well be that an America facing economic crisis could turn to the use of its vast military machine to even more directly exploit dependents and clients to obtain critical resources or markets, or engage in military policing operations to prevent nations from switching sides and joining adversarial emerging economic or political blocs.