All three of you following this blog – thanks, so much! – were probably wondering if the enlargement of BRICS matters, especially after I just got through dismissing BRICS as a potential challenger to the US Dollar. In a word, no.
In a much longer word: Bwahahahahahahahahahahaha!
<Giggle>
Okay, okay, let’s start with the elephant in the room. Saudi Arabia.
Give me a sec, I can’t do this with a straight face.
Yes, yes, Saudi Arabia has all that oil. We don’t need them any longer but our allies do so yeah, it’s kinda important. Kinda. The Saudis are in deep, deep trouble. Their entire economy is built on oil and oil doesn’t last forever. After seventy years of non-stop pumping, some of those wells are bound to run dry. That’s not catastrophic on its own. The problem is that the House of Saud stays in power by buying off the people. Saudi Arabia is the world’s biggest welfare state. When the cash cow dies, how you gonna stay in power?
Peter Zeihan correctly points out that the Saudis are also totally dependent on the US for their defense and they are skittish about how committed the US is to their protection. I disagree with him that this is the major driver – but it’s certainly a big part of why the Saudis are buddying up to China, Russia and even Iran. I think the major driver is the need to keep up their bank account balance to continue to buy their way into power.
It’s not that important. Either way, Saudi Arabia isn’t the power broker it once was and it is extremely unlikely to be a power broker in BRICS. A spoiled brat, that they can cover really well. The Saudis bring cash and attitude to the table. Their cash is no longer limitless and their attitude is as annoying as ever. BRICS is welcome to them.
Next up: United Arab Emirates: Basically, the Saudis with less money. These are the idiots that took Dubai to the height of tourist destination and managed to turn it into a tourist trap without the beer. Kinda sad but not significant at persent.
Everyone’s favorite: Iran: Bookmakers are taking bets on how long any alliance with both Saudi Arabia and Iran in it can last. Let’s just say, they aren’t giving good odds for anything long term. Iran wants to rule the Middle East and it is pretty much broke. Also, it needs Russia to supply it with military goodies – and nuclear know how would be a big bonus. Iran hasn’t been a reliable partner since the revolution. BRICS is going to end up a soap opera or a kindergarten.
Argentina: Inflation at 113% as of 8/27/23. They want a nice bank that will give them unlimited loans and not expect them to pay those loans back. Argentina is what happens when landed gentry marries socialism. Only Nazis move to Argentina and even they don’t move there anymore. Argentina only brings the fact that it’s a nation state to the table. Hysterically, BRICS wants to generate its own currency while the Argentine people are dollarizing as fast as they can get their hands on dollars.
Egypt: Too many people, too corrupt a government, too food dependent. Egypt is tourism dependent and would be doomed already if they didn’t have the pyramids. The US wouldn’t let them blow up Ethiopia’s dam so their hoping BRICS will be more supportive. It’s like going to your AA meeting on Saturday night at the local bar. They’ll get supported right into something stupid.
Finally, Ethiopia: Remember that dam I mentioned? Yeah, that’s all Ethiopia has going for it right now. I personally have a soft spot for Ethiopia but they are twenty years from being an asset. BRICS is more likely to pull Ethiopia under than to lift it up.
I suppose that just means BRICS will live up to its name.
