The non-Western world really trusts its scientific, technological, and financial expertise more than it should. Global commodity prices are sliding. If the Yuan zone was so mighty, and dedollarization was so mighty, they would have already picked up the slack. The US is suffering a financial crisis right now and China still can't seem to make decisive gains against the Dollar zone. Russia, by contrast, has been gaining on the Dollar, despite commodity price drops and violent market movements to the contrary. (https://tradingeconomics.com/russia/currency) This is the opposite of what dedollarization people expect and is a strong data point supporting my thesis that Russia is the one getting all the gains from China's decoupling with the West. What we're seeing is that the US suffers a financial crisis and China suffers a systemic shock. US demand declines and Chinese dollar loans start choking its capital markets. The Dollar has strengthened against the Yuan since the Ukraine war. China's GDP ratio with the US has declined and will continue. If the non-Western world had so much trapped potential, then why isn't it doing better in a market with declining commodity prices? The answer is that most of BRICS overestimates their abilities.
Russia is the leader of BRICS, even if it is not yet clear to all observers. Russia's economy will continue growing fast and continue its increasing dominance in BRICS. This is because Russia dedollarized long before the others and had to build redundant systems that replicated non-dollar zone performance. Russia is the market maker in arms, energy, and agriculture. It's pushing for market maker status in minerals, commodities, and currencies. That provides a base for easy industrialization, as these industries increase the import substitution market. This will pull in all that global money that Russia has floating around. Those with good memories and deep research skills will remember that Cyprus used to be the favorite place for Russian oligarchs to keep their money. Currency flows between Cyprus and Russia were used as a proxy to determine whether the investing climate in Russia was improving. From 1998-2001, there was some money going back to Russia from Cyprus, but after energy markets freaked out in 2001, Russia went back to relentlessly exporting capital. Now Russian capital isn't welcome in the West. So it buys up all the assets it can in the dedollarized world. And the net result is that Russia is eating China's lunch. You might not be interested in loan underwriting, but loan underwriting is interested in you.
And China can't underwrite for shit. Russia is a country of scammers, because the state puts the individual in a total adversarial position from the start. In that climate, you have to manage your own risk and rewards. So Russians are actually excellent underwriters. They know all about how to pump up asset prices and then loot it with loans. The Chinese thought they could make this magic work on anything, even ghost cities. That hasn't worked. Russia has been building ghost cities since back when China could only claim Shanghai as a modern style city. The Russians had a lifetime of getting ripped off by their governments and the Chinese are about 30 years behind them on this experiential and learning curve. China has to unwind all its bad investments (Belt and Road loans being the proxy), while Russia has spare cash to buy goodies at a discount. Comparing lifestyle, we see that people travel to Moscow to party, or they used to anyhow. People don't go to Beijing or Shanghai to do that. One city is more fun than the other and that means that there are more ways for a rich person to enjoy him or herself. And since metro areas are all competing over the same global rich, this gives Russia an additional edge when it comes to the lifestyle of a currency zone. China is not weak, it's just overrated... at the same power level as Russia, Japan, and EU. The difference between China and Russia is that China has overextended its reach and provoked a stronger coalition to contain it, whereas Russia conserved its strength and built its power base. Russia can project power, even as China's spheres of influence are now being encroached upon.
What of the other BRICS powers? India might produce the most engineers in the world. And South India has a high IQ cluster. India has more privately owned gold than the rest of the world combined. If Peter Schiff was right, then India would be a global superpower. Instead, all its wealth is trapped in gold, so the rich stay rich and the poor stay poor. There is not nearly as much market liquidity as goldbugs expect. Transaction costs are too high, which is what anti-gold people have been saying since modern economics formed. India is going Nazi in a way that is difficult for Westerners to understand, given stereotypes about Hinduism. (https://en.wikipedia.org/wiki/Hindutva) Suffice to say, it's a bad time to be Christian (26m+)(https://en.wikipedia.org/wiki/Christianity_in_India), Sikh (21m+), Jain (4.4m+), Buddhist (8.4m+), or Muslim (172m+) in India. The Muslims can move to other Islamic countries, but Indian Christians do not have the same cultural ties with Christian countries and are looking at genocide in our lifetime. They will not be granted visas in exactly the same way European Jews were not granted visas after the Nuremberg Laws. (https://en.wikipedia.org/wiki/Nuremberg_Laws) So the Indian Christians are in the same boat as Sikhs, Buddhists, and Jains, despite their numbers and supposed global community. India is also losing its best and brightest, because most educated people cannot tolerate totalitarian environments, even when they are in the insider group. This is because the Indian political-economic system has no role for them. Even worse, India's young women are part of this wave of its best educated people ever; but because of traditional gender roles and hyper-misogyny that would make most Western patriarchs jealous, this generation of women would rather be unmarried and/or live abroad. So India will face the same demographic decline as the rest of the world, just delayed. As poorly as Indians are treated in the United States (at least), it is better than India. So the Indian brain drain continues. India is not a contender to lead BRICS, it's just thrown in there, because it doesn't fit anywhere else. One could say this is true of all the BRICS countries: they are orphan teacups that do not match a set.
Brazil fits more neatly into the BRICS thesis of 'developing countries.' Even among the countries to which it is compared, it compares less favorably. A similar, but inferior resource base to the US. A smaller, less educated population. A lower technological base. An inferior capital goods base. It benefits from dedollarization, because it's a commodity exporter and a fragmented global market benefits commodity producers. Less fungibility of assets means higher transaction costs and isolated markets that cannot arbitrage price. The currency reflects its improving position. It benefits from being the commodity swing producer for the dedollarized zone. Probably why Pepe Escobar is so bullish. South Africa is a joke. It is apartheid in reverse, but nobody is brave enough to call them out on it. Another genocidal regime. Good company with India, and China. South Africa's currency halved over the last decade and its Rand GDP grew 10%. It's in the dedollarized zone because it destroyed its own economy with a state policy of White genocide and it's on the path to being like Zimbabwe. It joined the loser gang, because it was too poor to stay in its old neighborhood.
Just like every villain organization, BRICS is the gang of losers that teams up to get revenge. But they always wind up being a pawn. Russia reminds me of Kingpin.
He knew the score before anyone else did. He started down the path first and stays ahead with his personal intelligence, strength, and rage,
… which he uses to bully and coerce people inside and outside of his organization. And the bigger his organization, the more power he has to bully and coerce.
If South Africa belongs in BRICS, then so does Iran. It is in the top five countries by engineering graduates per year. It has some oil. Proved resilient to sanctions. Wannabe WMD program. It has so many problems, it deserves its own article. It's Russia's Mini-Me.
BRICS is trying to escape the Dollar trap, but the Dollar trap is a wildfire and the world economy is the forest.
Dollar inflation is a way of attacking less competitive currencies and economies until they are all destroyed, and there is no more juice to squeeze. This is how modern American finance thinks. Smash the competitor, capture its market, and make a new monopoly until smashed by the next disruption. This is why the monetary expansion in the US has not led to many of the predicted side-effects. We just replaced other currency zones. Out of the BRICS countries, only Russia is not famished for Dollars. All other currencies experience pressure and lose purchasing power, despite an expansion of dollars. This proves the Dollar is a better currency than most competitors. That's why dedollarization is a desperation move, not an act of strength.
When we look at the BRIC countries, we see they are not only lumped together because they are not in the G7, but because they are sovereign. They control their own trade and diplomacy. They have varying levels of capital-technical ability, but enough to be 'theoretically,' sovereign. Countries that cannot escape the Dollar trap and its trade zone cannot be said to be truly sovereign. The non-sovereign world is not just non-sovereign because they lack state power to enforce their status as sovereigns. They are non-sovereign because they cannot generate and maintain capital-technical enterprises and need to depend on commodity exports and tourism: both of which can only happen when there is international peace and a stable unit of exchange. These low tech areas might have high scientific capability, like Ukraine, but lack legal, cultural, and capital enterprises to convert science into tech and money. Ukraine only has capital-technical outcomes because of huge amounts of NATO money coming into the country. When they were on their own against Russia, they deindustrialized, lost their military, lost strategic capabilities, their population shrank, corruption destroyed enterprise, and the subsequent power vacuum drew in the US and its allies. The 2014 Ukrainian coup was a transfer of this non-sovereign country from Russia to the West. BRIICS is an economic zone, BRIC is a sovereignty zone. And while the whole thing exists as a theoretical Russian-Chinese axis, it is Russia that is reaping the most benefits.