The Peter Zeihan Podcast Series - Can a BRICS Currency Replace the US Dollar? || Peter Zeihan

Episode Date: November 7, 2024

I've said it before and I'll say it again, the US dollar ain't going nowhere. There's simply no other currency with the volume or liquidity to fill the shoes of the dollar. Join the Patreon here: https://www.patreon.com/PeterZeihan Full Newsletter: https://mailchi.mp/zeihan/can-a-brics-currency-replace-the-us-dollar

Hey, all, Peter Zion here coming to you from Palm Springs, California, one of the less natural places on the planet. It's something just hilarious. Okay, it's no surprise that I am kind of a, I don't know, dollar bull is the wrong term. That makes it sound like a financial play. I don't think the U.S. dollar is going anywhere. And I think the debt situation in the United States, while not my ideal, is not the thing that's going to tear down the U.S. dollar at all. In fact, there is no currency out there in the world that can replace the United States, in terms of volume or liquidity, no matter what the country or theory happens to be.

And something that really drives that home has now happened within the BRICS Alliance. Bricks Alliance, wrong word. Bricks Organization, it's not even that. Bricks Association. There we go. Anyway, there are some folks who think that BRICS is going to ultimately displace the U.S. dollar system and the global trading system and usher in a new world where the United States doesn't exist or some other nonsense. But let's talk about what happened in the last two summits.

First, November of 2023, the Summit in Johannesburg, in their opening statements, the South African, Indian, and Chinese delegations all said they have no interest in the U.S. dollar being supplanted. They have no interest in a BRICS. currency. And will everyone please stop asking them? The concept that the U.S. dollar is going away is largely one that is constrained to the fringes of the U.S. financial world with people looking for some new bizarre investment play. It really hasn't gone beyond that. Certainly countries haven't signed on to alternatives, largely because they really aren't any. The biggest one would have been the European euro, but when they started using insured bank's deposits to pay for bailouts 15 years ago, everyone got out of the euro. So now it's a regional currency. And in the aftermath of the Ukraine war, when the Japanese, the Europeans, and the Americans started to basically coordinate all sanctions, European policy and Japanese policy on most big currency issues became a subset of whatever the U.S. Federal Reserve and Treasury Department were doing.

So even that small window has passed. But the really hilarious thing happened in Russia this past week at the most recent Brick Summit that the Russians are hosting. And remember that the Russians are the most anti-American country in the world. And if there ever was going to be somebody who would actually be willing to pay through the nose to create something that bypasses the dollar, even if it doesn't do them any financial good, it would be the Russians. So they're going to have everybody coming to Kazan in central Russia for this summit to talk about all the ways that the Russians want to move away from anything that the United States touches. And on the topic of currency, and the prep materials that were sent out to all the delegates

were reminders that Russia's under sanctions, so don't bring your visa or your master card. They won't work. there may be a handful, like single-digit number of places in town that will use a Chinese charge card, but we really don't like that system either, so you really shouldn't count on that. You're going to have to use cash. However, it's really hard to get rubles outside of Russia these days, again, sanctions. So what you need to do is come with hard currency, and the only two hard currencies that Russian banks will now accept are the U.S. dollar and the euro,

because we desperately need it with our own country. in order to maintain any sort of trade relations with absolutely anyone. So bring your euros, bring your dollars, and when you can trade them for your rubbles when you get here, so you can actually spend money. But you won't be able to change them back because we need the dollars so bad. Oh, God, the fact that people still think that the dollar's going away,

I just, uh... Anyway, um, there may have been more to that, but honestly I'm just laughing too much inside. We're just gonna call that a day.