Al Profit: Petro-dollars, BRICS countries, you will own NOTHING

本站添加: 2026-05-22

[00:00:00]All right, you guys. I always forget to do my economics training courses, but there's two phrases I've been seeing thrown around a lot recently on the internet when people talk about the economy and the future of the global economy and the US economy. So, I'm going to explain two concepts to you. Petro dollars and the BRICS countries.

[00:00:25]Petro dollars, people say oh, petro dollars are what keeps the US economy flowing and petro dollars are important and the Saudis take away the petro dollars, this is going to happen and China is replacing petro dollars with their money.

[00:00:43]So, first petro dollars, there's no such thing as like a petro dollar. There's no There's no physical item that's a petro dollar. It's an idea.

[00:00:55]Well, it's a system, really. So, in the 19 mid to late 1970s, uh Saudi Arabia, which is the world's largest oil exporter, though they don't have the most oil. I think the United States and Canada have the most oil, but a lot of our oil is in shale. It's embedded in rock and it's more expensive to get out, though we can get it out. Saudi Arabia and Kuwait is are so important cuz they have the They have huge amounts of oil and it's very, very cheap to get it out of the ground. Saudi Arabia oil literally like they have these huge pools of oil, they just drill a couple hundred feet down and you just start sucking out oil, whereas it's like Venezuela has a lot of oil, but Venezuela's oil is expensive to get to.

[00:01:45]So, anyways, in the 1970s, Saudi Arabia, the world's biggest exporter of oil and the linchpin of the OPEC system, organization of of petroleum exporting countries, which almost all the big oil countries are part of, they come together to form a cartel to set prices and production limits or quotas or goals or ceilings or floors.

[00:02:16]And they started they would only accept US dollars for oil.

[00:02:24]So of course oil makes the global economy world global economy gold literally and the purchasing of oil with only dollar denominated assets. So you could buy it with debt, but it had to be US dollar denominated debt.

[00:02:43]Like treasuries or something you could trade it for.

[00:02:46]So that So money is a and is like a good like a physical item. So money is like ice cream in the sense of the more people that want ice cream where as we know as demand goes up the price goes up.

[00:03:02]There's eight tubs of mint chocolate chip ice cream left at the store and 10 people show up wanting to buy it. Well, two of them ain't going to want to pay as much as two of the other ones, right?

[00:03:14]And two people are going to as my father likes to say quoting from Snoop Dogg come up short. So now they're taking me to court.

[00:03:23]Um but so petrodollars the process of the Saudis only accepting US dollars for oil, which has become standard. Uh Russia, the other big exporters, pretty much all the big oil countries up until uh now and even now pretty much you can only buy oil on the global market in large amounts with US dollars. So the point of me talking about the ice cream was that money, like ice cream, is a good. The more demand there is for it, it keeps the price high. So, the fact that oil, one of the most valuable by far commodity in the global economy is bought with dollars creates a tremendous demand for dollars. People want to have dollars if only to buy oil with.

[00:04:17]So, what does that mean logistically?

[00:04:20]That might mean if you are whatever country X, West Germany, Germany now, Federal Democratic Republic of Germany.

[00:04:30]Uh you may be willing to accept a couple percent less on your BMWs if they're paid for in dollars so that you can have dollars to buy oil. So, the petrodollar concept that petroleum is bought with US dollars has always acted as a uh price inflator on the US dollar. It's kept the US dollar strong.

[00:05:01]The US dollar being strong Now that Now we come into an interesting economic uh um question.

[00:05:12]Is it good for your money to be stronger or not? Well, like most economic um things, there's not really a yes or no answer. It depends The answer is it depends who you are.

[00:05:28]So, if you're um well, if you're people that make, say, furniture, say you're a company in Grand Rapids, Michigan. It used to be a big office furniture place. And you make furniture that you try to sell to other countries. Well, the stronger the US dollar is cuz you have to pay your workers in US dollars, you're buying your lumber, timber in US dollars, etc. It's going to make your US produced goods more expensive than other countries. So, a strong dollar the petrodollars keeping the dollar strong makes our goods, because the US dollar is stronger, more expensive than other countries, which is one of the reasons why we don't export as much. We have a trade deficit and everything dang except Well, they say it's entertainment and weapons. I don't know, there's probably just a few other small sectors. I'm not sure, but I know those those those two.

[00:06:26]It's a hell of a combination.

[00:06:29]Um Gun guns and TV shows is what we sell the world. Um Well, I would imagine we must have a trade surplus in computers, but the way those companies have their accounting set up, they're not even US companies, so they don't have to pay taxes, but that's another story. Did you know that?

[00:06:46]Apple don't pay no taxes.

[00:06:49]Under Irish law, it's an American country, and under American law, it's an Irish country country, so it company so it don't pay taxes in either, but another story.

[00:06:58]So, uh is the US dollar is the petrodollar keeping you being one of the things that keep the US dollar strong is that good? Again, if you're someone who's manufacturing goods in the US and trying to sell them in other countries, uh you actually want the dollar to be weaker.

[00:07:16]But, if you're buying goods from overseas, now the US is in a trade deficit. We buy more from the rest of the world than we sell, which Trump in a very outdated way thinks that that's bad and that's weak.

[00:07:34]But, we're the richest country with the largest like Not only are we a huge country, we're 5% of the world's population, we're like 28% of the global economy.

[00:07:46]Uh we have a tremendous internal market.

[00:07:51]We can buy good, you know, we supply different states and regions, sell stuff to each other. The United States is its own economy. There's very little we need from outside unless it's cheap.

[00:08:04]Right? So that's why we buy so many Chinese good places where they have cheaper labor costs. And so our strong dollar, the petrodollar, part of the big part of the system is part of the reason, you know as it got into the '90s, you know, you like even now you can go to what the Gap or whatever and get, you know, nice printed t-shirts $5. I bought this is a nice shirt. I got it at the Bloomingdale's uh discount thing or whatever. I mean, it's like I don't know what was this? Like 30 or 40 dollars? It's a very nice very nice shirt. Part of that reason is because the US dollar is strong. If you're traveling overseas, it's good for the US dollar to be strong. So as a country that's in a trade our dollar being strong caught exacerbates the trade deficit, but it also benefits us cuz it makes us the incoming goods cheaper. So again, it's complicated. The dollar being strong helped put a lot of businesses out of business in America. The steel business, the garment industry.

[00:09:14]But uh the idea is that all of us now that we're buying say cheap Chinese t-shirts and cheaper steel is going into goods, that's less money we spend on those things. We have more money in our pocket to do things like buy American-made goods or go to restaurants and stuff, but everything is going online now, but that's another story. So, petrodollars is the system of countries buying or selling their oil only for US dollars cuz it's the most trustworthy stable currency.

[00:09:49]Russia, Saudi Arabia, everybody. Now, recently it made the news, uh I think was it Russia or somebody did sell might have or maybe Saudi Arabia to China has been able to buy some oil just now. Think about how China is a second biggest economy in the world by purchasing power parity is actually bigger than the US. Um and they just now are being able to buy a little bit of oil in their money, which isn't necessarily it doesn't hurt us per se. So, the petrodollar system is strong.

[00:10:27]It's probably not going away.

[00:10:31]And even if it did decline, does it matter that much? It's there'll be a winner and a loser. Which takes us to the BRICS countries, which is sort of tied in with that.

[00:10:43]So, BRICS stood for Brazil, Russia, India, China, and then they added South Africa for the S B R I C S.

[00:10:53]What are these countries doing? Well, they're having really nothing. It's those countries coming together and having meetings to try to talk about common economic interests as a counterweight to like the US. The US dollars lead the World Bank and the IMF. The IMF is the global lending institution. A third world country wants to build roads, borrow money from the IMF.

[00:11:26]Uh the World Bank, of course, isn't that important, but somewhat important, um loans out of money again to different developing countries. It's mostly important for developing countries, poorer countries, Africa, uh some parts of Southeast Asia.

[00:11:48]Um And the BRICS countries, Brazil, Russia, India, China, South Africa, wanted to start coming together and have it so they have a version of the World Bank, but it doesn't really loan any money out. They have a version of the IMF. Again, it doesn't really do much.

[00:12:06]Now, what it's really just nothing. I don't know why people talk about BRICS countries as if that's going to break the US's The fact the United States is by far the most influential economy in the world.

[00:12:24]So, Brazil, India, China, India and China have a lot of issues between each other. They have bloody border clashes from time to time.

[00:12:32]You don't hear about it. I mean, it's not like thousands of people died, but they have a militarized border. They're not buddies. But Brazil's in South America, India, China, Russia was at war obviously with Ukraine, uh and South Africa, which is in a whole 'nother part of the world.

[00:12:54]For countries to try to meet and have joint economic policy, well, they need to have similar economies. So, think about the United States as a grouping of 50 different states. The states are different from each other, but we all speak English. You can move between them easily. We all use the US dollar. So, Louisiana and Michigan, New York and Texas, Arkansas and Florida are all kind of pretty different, but you can move between them easily and there's interstate you can get on the interstate from one state and go to the other, and it's very easy to do interstate commerce in the United States. So, we can act in concert, and we have a monetary union.

[00:13:36]Uh we all use the dollar. The idea that Brazil, Russia, India, China, and South Africa could have a common currency is ridiculous, or that they would then use to buy oil with to replace petrodollars is ridiculous. Those countries The reason countries like to have their own currency What So, why do they think a country What What's so important about a country maintaining sovereign currency, its own currency, and its ability through central bank maneuverings, issuing more debt or buying debt back, which it can use So, so if India decides for economic policy it wants its currency to be a little weaker, so that um its manufactured goods are cheaper in other countries, the Indian government and central bank will sell lots of Indian It'll put Indian money into the global system. It'll buy US dollars, there we uh whatever money India, Chinese money, who whatever money, because the obviously the more money you the more Indian dollars it dumps, the more Indian dollars it uses to buy other people's, it makes the Indian currency go down.

[00:14:51]So, in which that makes Indian goods relatively cheaper. So, that would just be a political, "Hey, we want to sell more tractors, so we want to make Indian-made tractors made in Punjab uh cheaper relative to John Deere tractors.

[00:15:08]We need the Indian currency to be weaker. Let's buy a lot of US dollars and bring down the price of Indian currency and raise the demand for US dollars, and it'll help our internal Indian Punjab tractor manufacturers."

[00:15:27]Um, so there's that. Now, if you go into a union, right? So, if Brazil, Russia, India, China, South Africa all try to have a common money, which again is totally ridiculous. Well, India's economy is different than China India has a huge internal economy. They're exporting IT services, blah blah blah. You know, India's a gigantic country. Brazil is a country with a lot of oil, natural resources. India doesn't have oil.

[00:16:02]Uh, China, of course, is China.

[00:16:04]Whose economy is nothing like South Africa. I don't even know if South Africa has a fairly big economy for a country its size, but a country of 45 or 50 million like South Africa trying to have a common currency with the country on the other side of the world, China, with 1.2 billion people doesn't make any sense.

[00:16:21]Arkansas and Michigan may have different economies, but it's okay to have us both have the same currency, US dollar, cuz if crap if the economy's bad in Arkansas, you get in your car and you move to Detroit.

[00:16:34]And then if the way the economy flips, things are better in the south, you leave the north and you go back south.

[00:16:40]It's easy very easy to move to move internally in the US cuz we all speak the same language, we use the same money, we have a common general common culture.

[00:16:51]Uh, and we have interstate highways.

[00:16:53]It's legal. There's no checkpoints going from state to state. Well, I mean, there is for drugs and criminals, but generally speaking.

[00:17:01]So, those countries could never have an economic union. Recently, they've added like Iran and some other countries to BRICS. It's just a reason to have meetings, which brings me to the final third thing I forgot I wanted to tell you about.

[00:17:16]Uh, you will own nothing and like it or whatever Klaus Schwab, the World Economic Forum.

[00:17:22]You you got to stop quoting that World Economic Forum and Klaus Schwab as if that's some sort of government's policy. That's a private Klaus Schwab is just a guy that thought of a really good name that sounds official, the World Economic Forum.

[00:17:43]It's just a conference he has that he sells his speakers and you can pay to attend and you know, the people discuss different global economic issues and try to meet people and network and businesses are there. It's just a private you know, and Klaus Schwab is just a guy and he has these ideas about the future and he wrote it up. He's not the representative of any government. I could that name he came up with is really good. Davos is where a lot of action is at, but even Davos is not any country's official policy. But if I came up with the Al Profit Global Economic Forum and I booked different economics professors from different universities to speak there and then I had a you know, a special segment where I brought in young business you know, I had different uh topics, women-led businesses in Africa and I had some successful young women from Africa come and speak and I had uh indigenous whatever, different things from around the world and I on Tuesday the the the uh female entrepreneurs from Ghana will speak and on Wednesday it's going to be uh you know, Chinese rice farmers.

[00:19:06]Well, they would all be fine and interesting and you could come and meet different people and learn things. It wouldn't I'm just the guy that organized a conference that sells passes to it. It's not I'm not the spokesman of the United States. Klaus Schwab and the World Economic Forum is just a private event.

[00:19:24]That is just a conference.

[00:19:27]Do some important world leaders go to it? Uh they have here and there, a few.

[00:19:32]It's not the official policy of any country. The World Economic Forum is not even It's not like the World Bank or the IMF. It has no It's not formed by other governments. It's a private entity. So, whatever that guy wrote is just it's just a science fiction story. It's what his idea of what the future might be. There's It's not policy in anybody's country. The The World Economic Forum is just his private thing. So, there you go. You've learned about some basics about petrodollars, about common currency theory, what the BRICS countries are and are not, and what the World Economic Forum is and is not. So, stop the fear-mongering and uh economics, the best thing to major in.

[00:20:21]I'll private American dope.