How did the West create value? It started with barter, then gold, then someone stumbled upon financial mathematics which then cascaded into Keynesian and Classical economic blocks.
These blocks won disciples who theorized and expatiated, wrote books to defend theorems thus legitimizing their positions on pegging the dollar to gold, then puff—like all inventions, some ingenious whizkid invented a new value formula which summarily involves sitting behind a computer and typing zeroes behind ones, because they can. Unilateral fiat authority.
They then created institutions, alliances, and perfected the shiny new craft—et voila! Now they have sister organizations like the World Bank, IMF, et al, the rating agencies; they have created debt as we now know it, its mechanisms and criteria. I could go on and on, but let me spare you the boring details.
However, today, it seems everyone just suddenly woke from the sport.
In my last article in New Thinking, a month after Russia invaded Ukraine, I theorized, albeit rightly, that the war’s impact on the global economy and its key institutions—the World Bank, IMF, the use of the US dollar as global reserve currency, exchange rates, etc.—and the world as we know it, would be duplicated in function and in mirror fashion. Well, the only thing different from my prediction today is that these things have only occurred in faster fashion and in better format.
The New Development Bank (NBD) of the BRICS bank for example—with an initial authorized capital of $100 billion, established in 2015 with just 5 countries—has over 20 countries looking to join in ahead of its August 2023 summit in South Africa. Amongst them are Saudi Arabia, UAE, Iran and Nigeria. The NBD has so far lent $33 billion dollars to its 5 founding members and is preparing to embark on a formal evaluation of funding options.
After the Ukrainian invasion, which might end soon and on a negotiating table rather than a battle front as ongoing narrative indicates, my prediction is that all leading Indo-Pacific economies, the Middle East and Africa will surely belong to BRICS. Trust me, the “global economy” as it has been defined by the West, is about to be redefined by this “new global economy”—BRICS—which will control 75% of global economic output. A value no one can write down.
In about one year or so from now, Putin and Xi will be sitting behind a shiny new AI controlled supercomputer in downtown Beijing, with Xi’s hands on the keyboard while he asks Putin, “bruh, what value should I input for our other new global Bank? 1 trillion SDR’s, maybe?” Yeah, that makes cents! NDB is a trial run, there will be more, much more, and soon.
The IMF is valued at about a trillion dollars; the World Bank three times that. The new multipolar banks will each be worth way more, with SDR’s allocated through a board with equal voting powers amongst member countries regardless of contributions. This will make the process more transparent and equitable.
Value will be created the non-traditional way, albeit an adjusted American style: typing zeros behind ones. Tada! Let there be light! And there was light… God, what magic! That the rest of us couldn’t figure this out until now is what baffles me. The West is about to be gamed in their own sport.