Will Brazil & Argentina Succeed in Creating New Currency?

Hello everyone and welcome to Geopolitical Trends. My name is David Oualaalou. So good to be with you as always. To reduce the reliance on US dollar, Brazil and Argentina are preparing new Latin American currency. In this video, I am going to share with you my assessment about this financial move and how it will impact the global financial markets. Moving forward. So, uh, before I'll delve into all this, I want to first of all to say thank you to the channel's members and supporters. I truly, truly appreciate your continued support. And for you, if this is the first time you are watching my channel here, make sure to subscribe and hit the notification button so you will be notified every time I upload a new video. And to all of the subscribers, thank you so much for your support. So remember, by the way, guys, remember to join me live on Saturday the 28th at noon Central Standard Time, uh, for the live stream. We'll be discussing a fa— we'll be discussing a fascinating topic: space geopolitics, and yes, your role in the universe. So I look forward to that discussion with you guys. So Anyway, let's dive in here. So, so why? We will start with the provocative question. Why Brazil and Argentina are making plans for Latin American currency? So, because that's a common question to ask, you know. Well, I had a chance to read some articles. I usually— that's how I look for information. I dig into some think tanks analysis as well to read up. And I came across one article written by Ben Norton. I like to give credit where credit is due. So, uh, he is a, an investigative journalist but also an analyst. I actually like what I read when, when he shares his stories and so forth. It was another report by the Financial Times. Also, I found it very interesting. And by the way, both of those are linked to what I'm going to be talking about, uh, in general terms. So, so the governments of both Brazil and Argentina are making plans you know, to create a new currency for Latin America called the sur, a Spanish word for the south, in English, that is. So, and here's the thing, other countries in the region, Latin America, that is, will be invited to use the currency once, of course, it's established and so forth. And the goal, the objective of all this is to boost regional trade and reduce reliance on the US dollar. You all see where this is going, right? I am sure by now you understand that when I address topics or share a brief analysis or an assessment with you, I, I put things within the global context. This is no different here. So, so even Argentina's economic minister Sergio Massa, he told during an interview, during, I think a conference it was, that the South American nations will soon, and I quote here, let me get you guys the quote exactly what he said. He said, and I quote, start studying the parameters needed for the common currency, which include everything from fiscal issues to the size of the economy and the role of the central banks. End of quote. It's very loaded, but also sending a message here as to what to expect moving forward from a financial perspective, that is. And again, like I always say, you have to put this within global context. Look just what happened, what happened during Uh, what was it, uh, January the 19th, during a panel discussion in, in, in Davos, what the Saudi finance minister said. And I posted a video for you guys about that, that they are now considering trading in other currencies beside the dollar. That's a subtle hint to the American dollar for what lies ahead. So, but Like I would say, you have to put things within the global context to give you an understanding of why it matters to learn about this and understand, because any financial changes to the global system will impact you one way or another. Doesn't matter what part of the world you're in. So, so let me just state the obvious, and the obvious is this: a study of, and, uh, of mechanisms by which for trade and integration could take years to develop. Why? Like I always say, for new currency to emerge, you have to have the infrastructure for it, you know. And this, what Argentina and Brazil are doing, it's just the first step on a long road which Latin America must travel must travel if it wants to become independent of the US dollar. So, and again, this brings me to talk about BRICS. Why is this important? Because BRICS— Brazil, Russia, India, China, and South Africa— have been talking about establishing some sort of a currency by which they can trade among each other. Well, guess when they start talking about this? Back in 2000 13. Actually, the original conversation started in 2011. It was only till recently with the sanctions on Russia that now they are moving forward. And when I say they, I'm referring to the main countries in BRICS, Russia and China. They are getting more gold because anything that's gonna come out of BRICS is gonna be backed by gold. That's what it is. Latin America will be in the same direction, in the same path, shall we say. It's gonna take time, but at least they are starting on this. As a matter of fact, Brazil and Argentina now will be discussing the currency plans at the upcoming meeting of the Community of Latin American and Caribbean States, which will take in Buenos Aires on January 24th. That's when they're gonna be discussing this. It's the same pattern, same path the BRICS did back then. So, uh, the difference here, of course, is you have to keep in mind that Brazil, which is a member of the BRICS— Brazil, Russia, India, China, and South Africa— it has the largest economy in Latin America. Okay, Argentina, on the other hand, is considered the third largest economy in Latin America after Mexico. So basically you get Brazil, Mexico, and Argentina, three main economies in Latin America. So you can just see if Argentina and Brazil pushing forward with the creation of new currency, you all see where this is headed. I'm sure the American system is gonna now figure something out for Latin America. So, uh, I had a chance to read some sort of assessment or analysis by an Argentinian-based Spanish economist. His name is Alfredo Serrano Manc. You know, he is now the director of a think tank that is— this think tank is dedicated to regional integration the Latin American Strategic Center of Geopolitics, you know. And Alfredo Serrano said, and I quote, the path is to, is to find mechanisms which substitute the dependence on the dollar, end of quote. You know, the objective is clear, the goal is clear. They know why they want to create the currency. And when you take what's going on right now in Latin America with what the Saudis just have said, with what Russia and China and India are doing, with what Africa is doing, you can just see every country is moving into that direction of time to dump the US dollar. Because frankly, and I don't sugarcoat this because this is what's expected of an analyst, you can't be wishy-washy about the wording of certain things. Here's the thing. We have abused our power, the financial one, that is the dollar. That is when you start sanctioning countries right and left, you know, that kind of become an abuse. And this is exactly the result of that, because now what's going to be happening is once the dollar collapse, and it pains me to say this as an American, it's my country. You know, it doesn't matter. I criticize my country, but it's my country. So here's the thing is that most Americans are clueless as to what lies ahead. It's going to hit them like bricks. They have no plan in place. They have no strategy. They don't even know to what extent this is going to impact them. And it's going to have a major impact given what's going on right now in the United States with the debt ceiling. Controversy in Congress. So we already crossed over $31 trillion and we are borrowing more money from other countries, while at the same time you look at China, what they just did, they are selling US Treasury debts— the US debt rather. Japan is selling US debt. As a matter of fact, even Switzerland now just sold about $36 billion of US debt. Those are signs. So you don't have to be a geopolitical analyst to really put the two and two together and figure, okay, something's going on here. And this is exactly what's going on. So Brazil's President Lula da Silva, who returned to power just on— just 3 weeks ago, January 1st, you know, I remember during his electoral campaign back then Lula has floated the idea of the possibility of creating a regional currency for trade. No, and I recall on May 2022, last, last year, you know, he said, and I quote here, let me get the quote here for you guys. He said, and I quote, we are going to create currency in Latin America because we can't keep depending on the dollar. It will not be based on the euro model in that countries could maintain their sovereign domestic currency, end of quote. Basically, what he's referring to is that the creation of this currency won't be like in the euros. You know, I remember back then when I used to go— that was about a decade or so, actually longer than that— when I used to go to Paris, I will use the French franc. When I will go to Frankfurt or Stuttgart or Hamburg in Germany, I will use the Deutschmark. When I will go to Switzerland, I use the Swiss francs. You know, you can just see why. And Lula was smart enough to say that the countries will maintain their sovereign domestic currency because that is the problem right now in Europe. Why? Because when you have a country like Germany and you have a country like Greece, Well, the currency of Greece is useless to begin with, and yet the Germans will have to manage because that's part of the euro, eurozone. Every country will have to obey by the rule, shall we say. Even a country like Greece, with no offense to Greece, it's just financially is not where it needs to be. And here's the thing with this plan in Latin America for the currency, that is, the plan will be to use the SOR, which is the name of the currency that's going to be created for regional trade only, because the new global order that is changing going on, you know. And here is the thing, this is why I always say pay attention to the trends, because the trends will give you an idea of where things are headed, you know. And I did mention this in some previous videos before, and I'll say it again for you guys. The multipolar system, the new one that there is, it is upon us and we are in the middle of it. Be grateful that you are alive to witness this change from a unipolar to a multipolar, because that's where we are. And I remember saying that this new multipolar system is not going to be based on ideology. It's going to be based on economic blocks. And this is what we are witnessing right now. Once Latin America build its own currency and have its own blocks, ASEAN countries have their own blocks, RCEP, you know, the Southeast Asia, you look at Africa, all this an indication for— yes, you still have the, the EU, the European Union, which will become useless anyway, because it is my belief that if I am to think far ahead, I believe ASEAN will overtake that of the EU, will take— will overtake rather the, the European Union economy. Because more and more is becoming not that strong as it used to be. So, and here's what happened after Lula won the elections in Brazil, the, the October 2022 elections. You know, Ecuador politicians and economist by the name Andre Arroz— and I will provide you link to all these guys— so published a blueprint of a new regional financial architecture. Yeah, for Latin America. That's interesting. I've been following these guys from a distance because I like to read about individuals. By the way, this gentleman here, Andrés Arauzo, uh, he is completing his PhD in economics, by the way, and he ran for elections, presidential elections in Ecuador in 2021. Yeah, he was so close to winning, so I wouldn't be surprised he'd be back. So keep, keep an eye on this, on this guy. So, and, uh, so what he wrote back then on that blueprint, and I, I read some of it, so he wrote, and I, I got you guys a quote for you to put this in perspective. The goal, and I quote here, the goal is to harmonize the payment system of the countries that make up Uniswap, you know, in order to carry out interbank transfer to any bank inside the region in real time and from a cell phone, end of quote. That's what he wrote. So to me, that shows the depth and perception of how much he understands the impact of creating, a currency in Latin America and how it's going to impact the region economically speaking. So, so far for you guys, if you like this video, make sure please to subscribe and hit the like button. I really appreciate your support for that. So, so let me tell you, uh, uh, one aspect about Argentina because it's very interesting to address in this conversation. Argentina has suffered, has suffered the major issues when it comes down to debt that is owed to the foreign colonial powers for 200 years. Okay, well, today Argentina is trapped in about $44 billion of debt with a US-dominant IMF, International Monetary Fund. So this dollar-dominated foreign debt has led now Argentina to a constant drain of foreign currency out of Argentina, which is big problem. So fueling— because here's the consequence of that— draining of foreign currency is also paving the way for a high level of inflation in Argentina. Now you see why Argentina is eager to go along with Brazil into creating this particular currency. As a matter of fact, Argentina's president Alberto Fernandez visited China and Russia in February 2022, and the reason for his visit, it was to seek alternative to the US-dominated financial system and joining Beijing BRI, Belt and Road Initiative. Yes, and by the way, speaking of BRI, the Belt and Road Initiative, do you guys know that this year is the 10th anniversary of the BRI? Very, very interesting. I might make a video for you guys about this one because you need to know some things about it. So, and here's the thing, here's the other interesting aspect of this. Argentina has also applied to join the extended BRICS+ bloc. You know, it's because Buenos Aires, or Argentina that is, was invited in 2022 to, to BRICS summit that was held in China. And it was, by the way, the invitation was at China's request. So you all can see the moving parts within this geopolitical chessboard. As to where things are headed. And by the way, just FYI, Lula da Silva, the current president of Brazil, himself was a co-founder of the BRICS— Brazil, Russia, India, China, and South Africa. So both Brazil and Argentina are already part of South American trade bloc known as Mercosur. In Spanish, it's Mercado Común del Sur. Or the common market of the South. You know, they're already a part of it, the two major economies in Latin America. And the Brazilian president has for years emphasized the importance of an economic and political integration of Latin America and the Caribbean, for that matter. Speaking of Caribbean, do you guys know that China has some investments now in Caribbean. Yeah, so the interesting dynamics that's going on right now is that the Brazil, uh, uh, previous president, uh, Jair Bolsonaro, had sought to sabotage, uh, these organizations. Yeah, he tried by either withdrawing or suspending Brazil's membership and instead aligning the South American giant closely with the United States. So, and when he came to power, Bolsonaro, that is— how did he come to power, by the way? I don't know if any of you know the background story, so I'll share it with you. Of course, Bolsonaro came to power thanks to two US-backed political coups in Brazil, including parliamentary push against Workers' Party President Dilma Rousseff in 2016, and the politically motivated imprisonment of Lula da Silva on false charges in the lead-up to the 2018 elections. And here is the kicker that nobody knew about, you know. I had a— I never discussed it before. I was aware of it, but I share with you is that, you know, when Bolsonaro won the elections, do you know he traveled to the CIA headquarters in Virginia? Yeah, that's what happened. So, so anyway, by the way, Bolsonaro fearing now the legal consequences in Brazil for his flagrant corruption and for policies that caused the mass death of citizens Bolsonaro fled to Florida 2 days before his term ended, you know, and he's currently in Florida, uh, living as a fugitive from justice. So I don't know what's your opinion about Bolsonaro, but that's the reality of it. And by the way, I fact-checked this information and it's accurate. So here's my conclusion for you. There is a reason, there is a reason why, and again, use history always as your guide. There is a reason why the Golden Age of Exploration lasted 2 centuries to fuel the world capital— capitalism, that is. And it worked, it worked till then, you know. The one big challenge was that only the elite and perhaps some pirates benefited from it, and it led to the age of, sadly, imperialism, which still carries heavy consequences and meaning in the relations and emotions of the affected regions, countries, and societies. Now that we have learned from history we can say that the rapid changes on the geopolitical landscape can create a better future moving forward by being smart, or smarter, I shall say, with our decisions, with our actions, and with our finances also. This is why I keep saying the new multipolar world is not directed by ideology, but rather economic blocks. And I always say personally, supporting regional and local stakeholders for that matter, and experts, and being wise about the collaboration to affect long-term beneficial change where the need and opportunities align together. And everyone can benefit. This is why Latin America could be the answer. It's primed and ready for sustainable and impact investments. This is where I see it going. I hope you find this very informative. And as always, remember, geopolitics impact your daily life more ways than one. Till next time, guys. Bye-bye.