Europe loses importance, BRICS states

Europe is becoming irrelevant - New superpowers are already waiting

Europe will lose importance in the next few years, hard thesis, but there is more and more circumstantial evidence to support this thesis. If Europe does not promptly strive to secure its own independence and prosperity, this will destroy the prosperity of the Western world. Not only Europe is threatened with destruction, but the entire Western world. The damage is becoming more visible than ever.

Okay, enough of the brutal words, now let's get down to the nitty gritty.

I started this post back in the fall of 2022 and have been adding to it incrementally to gather relevant links and sources for my thesis.

Germany

In recent years, it has become increasingly apparent just how dependent Europe is on other countries, be it the Energy supplytechnologies or simply raw materials for further production. Germany, as an example, has positioned itself totally unfavorably geopolitically. Open to the U.S., which has a military base of operations with once American atomic bombs on German soil operate and use them as Control center for drone attacks in the Middle East use (the Greens have rejected it for years, now in government they no longer oppose it), some claim that Germany would still be under U.S. occupation (well, Germany is also abroad represented). On the other hand, until before Russia's war with Ukraine, one was open to its Gas and oil, of course, uranium and other raw materials, phosphorus and fertilizer as an example.

A trading partner that was easy to criticize, but did not interfere far in domestic affairs. One example where one made oneself unpopular in Russia was in the middle of the high of the Covid pandemic (start of the pandemic in Germany January 24, 2020), when Kremlin critic Navalny with a poisoning (20.08.2020), interestingly enough, was able to land in Germany quite quickly and came to the hospital, despite flight bans and entry bans (due to the risk of infection), even then there were critics, but that has also been quickly forgotten.

Besides the USA and Russia, Germany has another trading partner that you don't want to make angry, China. China, the Middle Kingdom, today shows itself technologically and militarily more and more approaching the USA and with the latest hypersonic missile technologies, China emerges as new nuclear military powerthat could take over the whole world without us being able to act fast enough. And Germany, we have to put well, so had to parts of the port of Hamburg (24.9%) to the Chinese group COSCO (China Ocean Shipping Company) and also the Chip manufacturer Elmos was to be sold to China, but this was prohibited by the federal government.

So we have 3 powerful trading partners who don't like each other and partly see the other side as the enemy. And Germany? We are in the middle of it and want to go through the world with a raised forefinger admonishing and saying what is wrong and right. And failure in everything.

I have another theory: Germany is the bitch of the USA and China.

China

China drives state-controlled e-car maker NIO conspicuously often through government district in Berlin, the state security is already active. Also the Chinese e-car Manufacturer BYD, will through a deal with Sixth Autovermietung in Germany 100,000 cars The data is also collected in the same way as with NIO.
At the same time, we can't really afford to do anything against China; we are too economically dependent and have outsourced companies there. For example, the Green Party's Foreign Minister Annalena Baerbock recently visited China's German company Flender, which produces gearboxes for wind turbines on the outskirts of the megacity of Tianjin in northern China. but for the Chinese market, not the German market.

Europe's dependence

The energy transition is a major fiasco, according to China produces 80~90% the solar cells49 billion euros have been invested there in the last 10 years, ten times more than in Europe. And the energy turnaround is supposed to take place in Germany? China has its own space station and is working on it, with microwaves the energy from solar modules stationed in space to the earth.

I could also cynically say that we leave out solar cells altogether, why? We go the detour in their production from coal and nuclear power, so that we import them from China to Europe/Germany, and then throw them away in 20-30 years, because they no longer provide a return. Then we can just stay with nuclear power, but well, that's another topic.

Iran as China's partner

For some time Iran now also accepts payments with China's yuan and also cooperation agreements with 25 years term and Chinese investment in Iran were decidedThis will allow the latter to circumvent U.S. sanctions and oil restrictions and sell oil directly to China through the yuan. Clever move. Already in 2016 China trade volume with Iran up to $600 billion agreed. As of 2020, China has almost double the export volume of the USAwhich, of course, is a great source of revenue. In turn, Iran benefits from the export of agricultural products to China, which leads to the improvement of the Iranian economy. Or that China and Iran conduct military maneuverswhether the USA will like that? China at least reaffirms Iran against interference from external forces, support.

Expensive energy transition and the Australian-Asian Power Link

Exciting things are also happening in the Asian region in terms of energy policy. gigantic power grid of Japan, India and Australia built, called AAPL (Australian - Asian Power Link), which is to make Asia fit for the future of renewable energies. Because Asia needs clean energy, this is to deliver Australia and on an area of 12,000 hectares (120 km²) this is quite reminiscent of the DESERTEC initiative in North Africa. Definitely the right solution, because Germany does not make it, our ailing power grid is falling apart and as of December 1, 2022, 11,000 redispatch measures for power transmission and grid stabilization were already carried out last year, as of April 15, 2023, there were already 5043 redispatch measures (Here you can download the reports).

This is a record that has never been seen before in Germany and probably not in the world. Perhaps Germany should take a leaf out of the book of countries that know how to build their infrastructure safely.

At least report the Austrians of electricity shortage in 13 redispatch measures (11/28/2022).  per year is the talk of the town. Exactly, 13, I have not made a mistake, Germany more than 5000, Austria 13. And while Austria of 14 million euros for the redispatch measures, one must look for it already purposefully, if one would like to know something in German to the current costs, because first has Bloomberg from the USA reported about itthat in 2022 a whole 3.5 billion euros were spent on redispatch measures in Germany, why you should German article only at Yahoo! Lifestyle is a mystery to me.

Turkey and Turkic States

Another player is entering the playing field and could establish a position of power in the Middle East that Europe has nothing to oppose. President Erdogan is doing his own thing with Turkey. Since Turkey has repeatedly failed to become part of the EU in the last 20 years due to circumstances that are not unfounded, a Turkish union is now growing there, or the Organization of the Turkic States (OTS), member states include Azerbaijan, Kazakhstan, Kyrgyzstan, Turkey and Uzbekistan; as well as observer states such as Northern Cyprus, Turkmenistan and Hungary.

Combined Map of OTS

Combined Map and Logo of Organization of Turk States, Public Domain License

A Turkish regional power (German Business News 12/26/2021Project Syndicate 06.12.2021), one dreams of a great republic of the Turkic states (Only 30% consider Germany a friend, which means that 70% do not see it that way), which would probably also be equivalent to a Turkish confederation, if Turkey were to take a key regional role here, which does not reflect the values of the European Union, but represents its own values, since the countries there are mainly Muslim countries, these countries will religiously culturally conditioned, reject the Western values, openness, freedom and equality, with some probability.

Turkey as a gas hub

Another point why Turkey will not need Europe in the near future is Russia's interest to consolidate economic interests, Turkey becomes the gas hub of the Middle East or West Asia, gas is transported from Russia via Turkstream and can thus be sent further to Europe via corresponding fees, since Nordstream 1 and 2 are no longer in operation, will be the gas then to southeastern Europe flow.

Also the Turkey's natural gas explorations in the Black Sea, are good for the economy, so President Erdogan has this Gas initially offered free of charge (20.04.2023), not unfounded self-interest, since they also wanted to catch votes for the presidential election here (which also worked (28.05.2023)), but it should even offered the gas at a reduced price until May 1, 2024 As a result, citizens have more money left over at the end of the month, which they in turn put into consumption, thus boosting the Turkish economy.

Hungary no longer needs the EU

A dangerous game, especially for the EU, is that due to restrictions on Hungary and Hungary's conservative positions towards the EU, have led to the fact that Hungary wants to join the Turkish Union and thus ceases to be an ally of the EU, already in 2019 the ZEIT wrote in an essay about Hungary being lost, and 2022 President Orban himself has already spoken of Hungary's withdrawal from the EU is being discussed, it was about more than 13 billion euros from the EU for Hungary.

The Turkish Union could now achieve direct intra-European influence in this way with Hungary. Perhaps one should then also keep a closer eye on this, because so far Hungary with its fence and the Turkey refugee flows stopped for money, one even spoke of Sending 10 million refugees homeThis is no longer the case or could also be used as a means of exerting pressure.

Germany's industry in decline

While the European Union and economy weakening more and more due to the broken interest rate policy and inflation turns into a hellish spiral, prices for energy and consumer goods rise. Wages, however, can only be adjusted slowly and this leads to stagnation of the economy and recession (my guess autumn 2022), Fewer and fewer people can afford anything, poverty is on the rise. And now (25.05.2023) is Germany's economy caught in recession, while the Minister of Economics is still in the April spoke of Germany's economy growingPerhaps we should really listen to independent experts when it comes to figures like these.
Since In 2006, the risk of poverty in Germany is increasing. Due to rising energy prices triggered by the war in Ukraine and the Trade embargoes against Russia (Mr. Habeck means we can afford the gas boycott against Russia), it will also be possible for the Industry increasingly uneconomical to produce in Germany (Academy Bergstrasse - Deindustrialization, listing of companies that have ceased production).

Brain drain and industry

Self PwC warns of a deindustrialization of Europe on 28.11.2022. Even in the ZDF about it is written openly that Germany becomes less attractive for companies (26.04.23), companies that can go, flee Germany, are no longer investing at home, but abroad. Even within Germany, a good mood is hard to find, yet many people leave Germany, most of them people with university degrees (24.03.2023)Expertise that is urgently needed in Germany is migrating.

Also VW backs away from plan to build new e-car plant in Germany. Instead, new plants are being built in China in record time, which also deliver models to Europe. Others are doing the same.

Medial were also called Hellma Materials GmbH, which is the market leader in the cultivation of synthetic crystals, due to the high electricity prices, it is no longer economical to produce in Germany (09.05.2023), added to which is the loss of confidence in the secure supply of electricity, where power outages have resulted in losses running into millions. The company has therefore 2022 a plant established in SwedenThe main plant is to remain in Jena, at least for the time being.

Wefa Inotec GmbH, on the other hand, prefers to migrate to Switzerland due to the lack of skilled workers, rising energy prices and bureaucracy, a family business in the 2nd generation wants to turn its back on Germany. One can already ask oneself, where the touted green economic miracle has remainedChancellor Scholz spoke about the fact that the Green transformation triggers an economic miracle, questionable for whom.

But let's get back to the topic at hand.

BRICS as the new antipole

And then there are the BRIC and BRICS+ countries.

The BRICS+ nations is an alliance consisting of Brazil, Russia, India, China and South Africa, and this alliance or community has the potential to cause a major upheaval as these challenge the dominance of the U.S. dollar as they look to break away from the U.S. dollar. There are also theories that the BRICS+ countries see bitcoin as a transitionHowever, the introduction of a CBDC (Central Bank Digital Currency), which could be the basis for a common currency, would not be unfounded.

The reason for this is that they want to separate from the euro as well as the US dollar and the new common currency should not be based on these. The first suggestions are that the currency should again be backed by gold or rare earths, but also Bitcoin would have potential to serve as inflation hedge, not so the US dollar or euro, where there is an inflation problem because you can always print more money, the US dollar has lost a whole 86% in value in 50 years, such inflation is not possible with Bitcoin.

What is special about BRICS, it unites more than 3.2 billion people, which is about 40% of the world population, while G7 unites only 774 million.

The four countries (BRIC without South Africa) generate a combined gross domestic product (GDP) in 2021 of estimated at around 20.4 trillion US dollars. Thus, the GDP of the BRIC countries is on the same level as the GDP of the USA, which amounts to about 24.3 trillion US dollars. For 2022, I could not find any data, but since China is mainly the GDP counterpart of the BRICS countries compared to the US, I estimate that for 2023, the GDP of the BRICS will be higher than the GDP of the US.

But where do the BRICS come from in the first place? The alliance itself, of course, form the countries, but the abbreviation "BRIC" goes back to the former chief economist of the major bank Goldman Sachs, Jim O'Neill (Global Economics Paper No:66 - Building Better Global Economic BRICs) from 2001, back 8 years before the BRIC was formed in 2009, since 2021 it has been the BRICS (S for South Africa).

New Development Bank vs International Monetary Fund

In 2014, the BRICS countries founded the "New Development Bank" (NDB) with seed capital of $50 billion as an alternative to the World Bank and the International Monetary Fund (IMF). In addition, a liquidity mechanism was created that Contingent Reserve Arrangement (CRA), which supports members in payment difficulties. Thus, countries of the BRICS alliance are not dependent on G7 institutions such as the IMF and are politically independent of credit-dependent reforms.

BRICS grows

19 other countries presented in the April 2023 to apply for membership in the BRICS Alliance., including: Argentina, the United Arab Emirates, Saudi Arabia, Algeria, Egypt, Bahrain and Indonesia. Other countries have applied for membership. Through the above countries alone, the influence of the BRICS alliance would expand by 519 million people in the world, instead of 3.2 billion people, would then be at 3.7 billion people and 46.25% of the world's population as of 2023 (8 billion people).

Another reason why BRICS may emerge as a global counterpart to the EU or G7 countries, which are BRICS have not prompted sanctions against RussiaAfter the attack on Ukraine, since the West boycotts Russian oil, gas and other products, they can be bought cheaper in the BRICS countries due to lack of demand, which leads to the fact that these countries will be economically better off.

Digital Rupee, Chinese Yuan or R5?

As Coingeek reports, wanted Russia the digital central bank currency digital rupee 2024 release, instead it will be launched as early as the end of 2023. The Indiatimes in turn reports that the Chinese yuan in Russia the most traded currency has already replaced the US dollarIt would be logical for China's yuan to be used as a common currency within the BRICS countries, since China accounts for the largest share of the BRICS countries in terms of GDP and population. Another argument in favor of the Chinese yuan is that Brazil's President Lula made the agreement with China, the Chinese yuan for cross-border trade. used.

But there is another approach, instead of the Chinese yuan, you could also use the Introduce substitute currency R5. R5 is a BRICS cross-border currency and stands for Real, Ruble, Rupee, Renminbi, Rand, the designations of the BRICS currencies.
I think this would even make sense in the long run, as it would simplify trade between countries and thus be a direct competitor to the euro.
So it is not yet certain which currency the BRICS countries will use in the future.

And the USA?

This seems to be heading towards uncertain times, politically buffeted, and soon close to insolvency. Current expenditure (e.g. social welfare, civil servants' salaries, pensions, public contracts). would have to be stopped immediatelybonds and interest payments that are due could no longer be serviced. One would be a social drama, the other a drama on the financial markets.

The USA would probably fall into civil war-like conditions (history has shown it before), and the Effects on the financial market would be felt throughout the world, but probably less strongly in the BRICS countries, which would have a clear advantage due to their independence from the U.S. dollar and could dominate the world market in the event of a prolonged insolvency and replace the U.S. as a global power.

 

Final words

I have now reached the end with this article after several months of work, I have shown here which countries and associations of countries could dominate the world economy in the future, whether they make it, the future will show, maybe my forecast is also wrong, who knows?

I would like to note that I look at the countries and alliances of states from the perspective of a neutral observer and do not (try to) evaluate them personally. I am neither a supporter nor an opponent.

 

Further sources

Japan-India-Australia: Gigantic power grid makes Asia fit for renewables

Companies Flee Germany - Exodus of German Industry

BRICS to discuss possible common currency in August

 

 

Posted by Petr Kirpeit

All articles are my personal opinion and are written in German. In order to offer English-speaking readers access to the article, they are automatically translated via DeepL. Facts and sources will be added where possible. Unless there is clear evidence, the respective article is considered to be my personal opinion at the time of publication. This opinion may change over time. Friends, partners, companies and others do not have to share this position.

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