The New Financial Order and the Role of Bitcoin

Arabia Saudita, Iran, United Arab Emirates, Egypt, Ethiopia, and Argentina. These are the six countries that have been officially invited today to the BRICS summit to join the bloc starting from January 2024. However, the invited countries will have to fulfill certain conditions that have not yet been fully disclosed. During this announcement, the president of Brazil, Lula, stated that with these new members, the bloc will account for 36% of the world's GDP and 46% of the total global population.

And the possibility of negotiating loans in local currencies and moving away from the dollar is a shock to the current geopolitical and monetary system.

After all, the United States made the dollar the global reserve currency through its alliance with Saudi Arabia in the creation of the petrodollar, and now this era is shifting, right? It's moving towards the BRICS side and no longer towards the United States

And it works more or less like this, at least until now.

The United States buys oil from Saudi Arabia, it pays Americans and their companies, right? To extract the oil.

In its territory, using technology and services, American banks lend dollars to other emerging economies, on the condition that they continue to use the dollar to buy oil, and Saudi Arabia ends up holding these dollars it receives in American assets, bonds, other securities, and even prices its commodity in dollars.

The United States, very cleverly, have created this cycle of positive feedback that increases the demand for the dollar as the demand for oil also increases.

Thus, the Americans managed to manipulate and increase the global demand for dollars.

And no matter how much money they printed, it devalues.

If the dollar were to devalue much more slowly than other currencies, it's because the demand for dollars is greater than any other currency on the planet, as the demand for oil is also significant.

This also means that oil has become increasingly expensive for countries with weaker currencies. Any country that tried to buy or sell oil in another currency faced sanctions and retaliation from the Americans. This is known as the exorbitant privilege of the dollar.

Only they have the global reserve currency and the privilege of printing as much as they want while still maintaining growing demand.

In the end, American bonds replaced gold as the global store of value, and the BRICS movement to offer loans in local currencies is a way to reduce the demand for the dollar and attempt to break this exorbitant American privilege, from the biggest money printer that put them in the hegemonic position they still hold today.

And no matter how much many people say otherwise, the winds are beginning to change.

Saudi Arabia is changing its position.

It is abandoning its alliance with the United States and has been signaling for nearly a year that it would break the petrodollar alliance.

It has started selling oil in Chinese yuan. This is because the dollar has lost purchasing power.

The insecurity with the American economy is growing, and the global South is joining in opposition to the G7, the IMF, the World Bank, and these measures to expand the bloc and use the BRICS Bank as an alternative to established multilateral lenders, which are the IMF and the World Bank, thereby raising concerns among some Western leaders, like Werner Roer, head of the European Investment Bank, who has just warned Western governments that they are in danger of losing the confidence of the global South unless they urgently intensify their own efforts to support poorer countries.

And what does intensifying support mean, right? What is very interesting is that Bitcoin operates on a different track.

It's a obviously smaller financial system, but it's strengthening in parallel and ultimately eliminates the possibility of printing money for political maneuvering, because in the end, both the United States, Europe, and the BRICS countries want the ability to print to generate debt with other countries in their own currencies and to be able to exact favors through collaboration on their political issues.

The result is that the ones who lose the most are the global population using these currencies, witnessing their purchasing power decrease, their wealth melt away, and inflation continue to advance.

The power may change sides, but the mechanisms do not change.

Bitcoin breaks this cycle because it does not allow the printers of any country to engage in populism within and outside any territory.

It's a matter of time until this becomes increasingly evident. In the meantime, we continue to follow and see politics changing sides, but applying more of the same.

The same give and take of the past 50 years."