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