Name: "Most People Have No Idea What's About To Happen To BRICS”
Uploaded: 2025-10-07T18:48:22.000Z
Duration: 20 min 37 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

The US economy has entered a danger zone.

The superlative

In 2008, the United States took a very serious decision that it's going to run the largest deficit in history.

Past simple

That should have ended the dollar as the global reserve currency, but it did not.

So it angered many other large nations such as India, Russia and China.

Because from now onwards, the United States could print its way out every single crisis while these nations had to work hard, build real stuff in, in order to grow their economies.

But the United States on the other side, could continue growing its economy by just borrowing as much money as it possibly can.

So in 2009, these countries came together and created an alliance called BRICS in order to put an end to the dollar as the global reserve currency.

And since then, there has been a lot of rumors that they will come up with a currency that will replace the dollar as the global reserve currency.

However, 16 years later, not only that these countries could not even build a common currency, but

they are far away to ever replacing the dollar as the global reserve currency.

So how is it possible that the United States has the largest debt in history, that the United States is running a 2 trillion dollar deficit, and

yet nobody can even challenge the United States.

And these huge nations that are economically bigger than the United States, that have far more people, that control far more resources, cannot even build a currency that could challenge the US Dollar.

Now to understand that, we have to understand how currencies work in the first place.

A currency like a dollar or a euro or a pound is an artificial commodity created by the government to control the economy.

Purpose primarily to control prices on one side and to grow the economy on the other side.

because when people buy things, they use the local currency and the government has a monopoly on that currency, the government can simply limit the inflow of that currency, which is going to slow down the demand, which is going to slow down inflation and prices won't get out of control.

If the government would have used the gold as a currency, then the government would not have that power because the government do not has all the gold in the world.

On the other side, it's about economic growth.

When the economy slows down, because the government can artificially create that currency, it can pump money into the economy, which is going to drive demand in the economy, which is going to grow the economy, because the economy runs in multiple cycles.

So there is a period of prosperity when the economy is rising dramatically.

But at that stage things could get out of control and prices could rise way faster than anybody else wants.

So in order to prevent the economy from turning into one giant bubble like it happened in 2008, like it happened in late 1990s, or like it happened in multiple other occasions in American history or the history in the world.

In fact, the government can limit the supply of money, which is going to slow down the demand, which is going to prevent the bubble from forming or from getting even bigger.

At certain point, the economy slows down and it turns into a financial crisis or a market crash.

And that crash could last a few months or sometime it could even last a few years or even 10 years.

We call it a recession if it's two consecutive negative GDP growth quarter or a depression when it lasts more than two years.

In this case, the government has a tool to control the economy.

It can literally print money, create artificial demand, push people to start investing.

People start buying, people start investing.

For example, the government can start borrowing money because the currency is artificially created.

Take that money, start a couple few more projects, hire people.

Those people will receive paychecks from the government.

They will take the paychecks, they will go and buy a car, trip themselves in restaurants, buy houses, that, that money is going to circulate the entire economy.

And the economy slowly gets out of that financial crisis.

And that's why it's extremely important to have a currency and not have gold as a money in the economy.

And all of that is done by the central bank of that country.

In the US it's the Federal Reserve that has the power or the authority to create the dollars.

The first tool at their disposal is the interest rates.

By raising the interest rates, borrowing money becomes more expensive.

So if you wanted to open that coffee shop or start that business, if interest rates are 10%, you're going to think twice before borrowing money to start coffee shop.

If your coffee shop is not making enough profit, you won't be able to cover the interest on that debt.

You're not going to borrow money, you're not going to spend and inflation is not going to rise.

On the other side, if interest rates are dropped to 1% suddenly, if your coffee shop is making 7% ROI and you can borrow money at 1%, it makes sense to borrow that money and open your coffee shop and start doing business.

Another tool is of course, quantitative easing or quantitative tightening.

Now, quantitative tightening is basically opposite of quantitative easing.

When the central bank directly buys a lot of government bonds, that gives the government a lot money, and

that a lot of money will be spent on the economy, which is going to drive economic growth.

And that's how basically currencies work.

Now, it's very difficult to have one currency for two different nations.

Let's take an example of the European Union.

So we have Germany on one side and we have Greece on the other side.

And both of these nations use the Europe.

Now, the problem is that these two economies could be at entirely two different economic stages.

One could be growing dramatically while the other could be in a financial cris.

So the right policy for Germany might be to hike the interest rates to prevent it to turn into a bubble, while for Greece it might be to lower interest rates or devalue the currency so that the country gets out of the financial crisis.

But you cannot possibly do that because you have one currency.

And if you have one currency, then both of these countries have one central bank.

And that central bank cannot possibly have one interest rate for one country and a completely different interest rate for another country.

And that's why, because that is impossible.

And if you ever have that, why have that if you can simply have two entirely different currencies.

So in order for two or more countries to have one currency, like in the case of the European Union, you need these economies to be deeply integrated, so they have to function as one giant country.

all 50 states use a single currency because they act as one giant country, because there are one giant country.

But in the European Union, they're trying, or have been trying to integrate their economy so much that they won't be competing against one another, but

rather they will be complementing one another.

They're producing Mercedes, they're producing BMWs, they're producing a lot of really sophisticated technology.

But France is major in agriculture and luxury products.

Louis Vuitton or Dior or other famous luxury brands are all coming from France and not Germany.

And then you have Spain, that attracts the rest of the world with its tourism.

Spain is not building really fancy cars, but

it's mostly the place where you come to have a very beautiful, nice vacation.

And then in the southern part of Europe, you have Netherlands, that is, specializes in logistics.

It also specializes in a lot of other technologies.

But it has one of the largest ports in the entire European Union and literally specializes in logistics.

So European economies are very deeply integrated.

So when one of them gets into a crisis such as the Greece debt crisis, the rest of the union cannot possibly function because that country is in a crisis and it drags the rest of the countries within itself.

The logical thing, for example, when Greece went into a debt crisis, would be for Greece to devalue its currency.

So it will be easier for Greece to pay off its debts.

Yes, invest to suffer, but investors will view Greece as a very risky investment.

But because Greece borrows money in euro, it also puts in danger the rest of the countries that borrow money in euro.

And the reason that the rest of the countries are borrowing money in euro is because euro is a single currency for all of these nations.

And that's why growing European economies is so extremely difficult.

Now, the Euro is not a very old currency.

It came out literally like 25 years ago, and

eight years later, it actually encountered the biggest challenge in its history.

And since then, European economies are not growing much while the US Economy is growing tremendously.

Subtitles ListPlay Video

"Most People Have No Idea What's About To Happen To BRICS”

literally

extremely

crisis

exact