BRICS nation’s potential new currency challenging the US dollar

00:01 hey everyone let’s talk about the bricks
00:03 countries BR
00:05 RCS and the discussion they’ve had over
00:08 the last few years about a bricks
00:10 currency a new currency that will
00:13 supposedly compete with the US dollar
00:15 first of all not going to happen um but
00:17 secondly let’s talk about it so what is
00:20 bricks brcs is Brazil Russia India China
00:25 South Africa b r i CS it stands for
00:28 those five countries Brazil China sorry
00:30 Brazil Russia India China South Africa
00:35 bricks okay so the bricks countries now
00:37 and then will get together to discuss
00:39 strategies that involve uh being annoyed
00:42 that the United States is the world
00:43 dominant uh country and that we control
00:46 a lot of things related to trade and Rel
00:48 related to tariffs and related to money
00:50 and all of that and so periodically they
00:52 will get together and have the bright
00:54 idea that they are going to release
00:56 their own uh bricks Reserve currency to
00:60 comp with the US dollar now why why is
01:03 one of their currencies not a world
01:07 Reserve currency the answer is because
01:09 what matters with money is The
01:11 credibility of its monetary properties
01:13 and how salable it is meaning how much
01:15 everyone in the world will accept it
01:17 well right now nobody trusts those
01:19 countries nobody trusts the currency of
01:22 Brazil or Russia or India or China or
01:26 South Africa so if if if if you get five
01:30 countries together that all have
01:32 currencies that the world does not trust
01:34 as a world Reserve currency and you say
01:37 hey let’s get these together and let’s
01:39 create a new currency backed by these
01:41 five countries then the question is why
01:43 is that currency going to be more
01:46 trustworthy than the other five like
01:48 because here’s their options one they
01:50 could base it on gold and they could say
01:53 they’re going to base it on gold but
01:54 every currency that’s ever been based on
01:56 gold that wasn’t gold eventually broke
01:59 the gold Peg what that means is it it
02:02 eventually was not backed by gold the
02:04 most recent was uh uh Zimbabwe released
02:07 a new currency that they claimed was
02:08 backed by gold and it literally lasted
02:10 less than 6 months within six months
02:12 they admitted that it was not actually
02:14 backed by gold they had printed too much
02:16 money and they had to massively devalue
02:18 it by like 30 or 50% or something
02:20 ridiculous maybe 100% you know or you
02:22 know drop the value by 50% it was
02:24 something ridiculous so they can either
02:26 back it by gold in which case it’s only
02:29 a matter of time until they break that
02:31 promise every other country in the world
02:33 has broken that promise eventually or
02:35 they can back it by their own currencies
02:38 but if none of their currencies is
02:39 credible as compared to the US dollar
02:42 then why is anybody going to trust that
02:44 an amalgamation of their five currencies
02:47 is going to be more trustworthy than the
02:49 US dollar and the answer is they’re not
02:51 so you can’t just mix five bad you know
02:56 five bad currencies together that are
02:58 all losing value faster than the US so
03:00 if you think if you think the US dollar
03:02 is bad imagine five currencies that are
03:04 all worse than the US dollar all shoved
03:07 into a blender mixed together to
03:09 generate some new gross colored soup of
03:12 a new currency it’s not going to happen
03:14 nobody’s going to accept that as as
03:16 currency they’re not going to accept a
03:17 gold backed currency issued by the
03:19 bricks Nations because they’re not going
03:20 to trust that it’s actually gold backed
03:22 and they shouldn’t because it won’t be
03:24 so um or they can back it with again
03:27 with their own currency but if they back
03:28 it with their own currency then you’re
03:30 just getting ba five badly managed
03:33 currencies all mixed together um they
03:35 could also issue in new currency but as
03:37 we’ve seen with the Euro where you know
03:39 something like 20 plus I think the Euro
03:41 zone is like 27 countries but I think
03:43 some of them are not on the Euro
03:45 standard so however many however many
03:47 countries use the euro let’s call it I
03:49 don’t know 25 whatever it is the 25
03:51 countries that gave up their local
03:53 currencies to create the Euro the Euro
03:55 has all sorts of problems of its own now
03:57 of of losing money so the Euro has been
03:59 managed more I guess less responsibly
04:03 than the US dollar and that was the
04:05 amalgamation of you know a couple dozen
04:08 countries currency so if mashing a bunch
04:11 of lowquality currencies together
04:13 created a high quality currency then the
04:16 EU the euro in the European Union would
04:19 be outperforming the dollar the reason
04:21 it is not outperforming the dollar is
04:23 because it actually created a weaker
04:24 currency it might be stronger than some
04:26 of those country’s currencies but it is
04:28 not stronger than you know countries
04:32 like uh you know individualized
04:33 currencies like the UK or uh Switzerland
04:36 Actually I don’t even you know the UK
04:38 currencies has problems too so I don’t
04:40 know it’s not better than let’s say
04:41 Switzerland or something that did not
04:43 give up their own local currency um so
04:46 anyway mashing poor poor performing C
04:48 currencies together does not create a
04:51 better currency issuing a new currency
04:54 that is backed by those countries also
04:55 doesn’t work because what are they going
04:56 to back it by you know if they’re
04:58 backing it by their full faith and
04:60 credit all they’re really doing is
05:01 backing it by their currency because
05:03 that’s the only way that you can
05:04 manifest your full faith and credit and
05:06 again if it’s backed by gold you have
05:08 the problem of who’s going to store the
05:09 gold there’s another much bigger problem
05:11 which is who controls the currency these
05:14 five countries are never going to agree
05:16 on who controls the currency every one
05:18 of them thinks they should control the
05:20 currency so not only are we not going to
05:22 get a strong currency issued by those
05:25 five
05:26 countries because they just have weak
05:28 currencies but they’re also never even
05:30 going to agree on who gets to control
05:31 what so they’ll start out with well we
05:34 each have one seat on a five member
05:36 Council well inevitably the bigger
05:38 countries will want two seats on a 10
05:39 member Council and it just goes round
05:41 and round and round and they can never
05:42 agree and they can never agree because
05:44 you can never get everybody to agree on
05:46 a monetary system that benefits everyone
05:49 equally all of their currencies are
05:50 different their populations are
05:52 different the strength of their
05:53 economies are different and they’re just
05:55 never going to agree to um you know to
05:58 let each other manage you know the
06:01 currencies so it’s just not going to
06:03 happen and if it does it’ll be a you
06:04 know Euro 2.0 and we’ll end up with a
06:06 bricks currency that’s you know probably
06:09 worse than the Euro as far as the
06:11 strength of the currency and the Euro
06:12 has not been a serious threat to the US
06:14 dollar either so there’s only one thing
06:18 that they could do that would work which
06:19 is pointless which is they can introduce
06:21 their own new currency back to by
06:23 Bitcoin but there’s no reason to do that
06:25 because why would you use a currency
06:27 back to buy Bitcoin when you can use bit
06:30 coin the only reason people do that with
06:31 gold is because gold does not work well
06:34 as a transactional currency it’s not
06:36 divisible it’s not easily portable it’s
06:38 not you know there’s all sorts of issues
06:40 with gold and so that’s why uh now and
06:43 then somebody will try a gold back
06:44 currency because they’re like hey it’s
06:46 more authenticatable it’s more divisible
06:48 you know it doesn’t have these problems
06:51 that gold has but in the case of Bitcoin
06:53 Bitcoin doesn’t have any of those
06:54 problems Bitcoin is durable it is
06:56 divisible it is authenticatable it is
06:58 portable it is scarce it has all the
07:00 properties of the perfect money so
07:02 there’s no reason to put a bricks
07:03 currency on top of it and claim that
07:06 it’s backed by Bitcoin so the short take
07:08 is I am not worried at all about a
07:10 bricks currency one I don’t think it’ll
07:12 ever come to be to to pass two if it
07:15 ever does come to pass it will be after
07:17 insane amounts of bickering among the
07:19 countries about who controls it uh
07:21 number three it won’t be backed by
07:24 anything and if it is backed by
07:25 something it’ll be backed by gold which
07:27 inevitably will not be a true backing
07:29 it’ll end up uh you know that will be a
07:30 promise that is broken or it’ll be
07:32 backed by the local currencies which are
07:34 you know the whole point of of trying to
07:36 introduce a new currency is that people
07:37 don’t trust their their existing
07:39 currency and five you know the only good
07:42 alternative is Bitcoin and there’s no
07:43 reason to make another currency backed
07:45 by Bitcoin unless you know you could
07:47 argue it makes sense in the in the case
07:49 of the US because the US dollar is so
07:50 widely used so if you wanted to try to
07:52 back the US dollar with Bitcoin with a
07:54 strategic Bitcoin Reserve that could
07:57 make some sense uh but that that is only
07:59 because the the US dollar is already the
08:01 world Reserve currency it would be
08:03 difficult to accomplish that with a
08:06 currency that was not already the world
08:07 Reserve currency and even if it happens
08:09 even if the bricks countries did create
08:11 a bitcoin-backed currency well that’d be
08:14 great for all of the rest of us who hold
08:15 Bitcoin because in the short term they’d
08:18 have to buy a bunch of Bitcoin in the
08:19 long term they would break their promise
08:21 but the people who would be harmed were
08:23 people that trusted the bricks currency
08:24 not people who trusted Bitcoin um when
08:27 countries have come off of the gold
08:28 standard uh the price of gold went up
08:30 not down because because um you know
08:34 what it meant was that they had printed
08:35 way too much money and the gold was
08:36 actually worth a lot more than the money
08:38 represented and the same thing would be
08:39 true in the case of Bitcoin is if
08:40 somebody created a Bitcoin back currency
08:43 and then ultimately that became a world
08:44 Reserve currency and then they broke
08:45 their Promise by printing too much of it
08:47 the underlying Bitcoin would still be
08:49 way worth way more even if the currency
08:51 built on top of it ended up being worth
08:53 less and for somebody like me I’m never
08:55 going to hold a bricks currency I’m
08:57 never going to hold a currency based on
08:59 bitcoin I can hold Bitcoin the real
09:01 thing why would I trust some currency
09:03 based on something when I can have the
09:05 real thing safely held in you know Cold
09:08 Storage with a solution like bit key
09:10 that’s super easy to use and has no
09:13 counterparty risk meaning I’m not
09:15 trusting anyone so I am not worried
09:17 about the bricks currency at all I don’t
09:19 think it’ll ever come to be if it is I
09:21 think it will fade out with time and the
09:24 only solution that would actually work
09:27 is to back it by Bitcoin which is going
09:29 to benefit me even more than it benefits
09:30 whoever uses the currency that’s
09:32 pyramided on top of it so there’s
09:35 basically as a Bitcoin as a Bitcoin
09:37 owner I don’t see where the the bricks
09:38 Nations do anything that hurts my value
09:42 or my ability to use or store value in
09:45 Bitcoin all they could do is stuff that
09:47 would help it but I don’t think they’re
09:48 even going to do anything I think it’s
09:49 just going to fall by the wayside
09:51 they’ll keep talking about it to try to
09:53 create leverage to get the United States
09:55 to do stuff with the promise and the
09:57 pledge and the threat that the bricks
09:60 nations are going to create their own
10:01 currency and walk away from the US
10:03 dollar but they’re not actually going to
10:04 do it it’s not actually going to happen
10:06 it’s just never going to happen and
10:08 again if it does happen it’s so what
10:09 it’ll be like the Euro you know people
10:11 had high hopes that the Euro uh in the
10:13 early days that was going to Dethrone
10:15 the US dollar because it was the you
10:17 know the the currency of all these
10:19 nations and whatever it had like
10:21 practically no effect there’s almost no
10:23 demand for Euro you know back stable
10:26 coins for example nobody wants to back
10:27 anything with the Euro so I’m not
10:30 worried about the bricks Nations at all
10:32 it’s as they say in politics a nothing
10:34 Burger I like that term it’s a nothing
10:36 Burger so there you go