The "BRICS IS Cringe" Video by Laowhy86

BRICS is Cringe Video Recap

(forgive the formatting mess)

YouTube's laowhy86 lays out an interesting case for not worrying about BRICS overtaking the G7.  It has some flaws, but here's a recap:

• The BRICS countries all hate eat other.  
• China and India are practically at war.

His thoughts on China:

Regular power outages
High unemployment rates in China
You can't get your money out of China
Massive corporate moves out of China
Lots of government ownership of companies
Huge levels of debt
Trade war with the U.S.
Housing market has collapsed
Banks are not paying loans to people despite protests
The white paper protests 

His thoughts on Russia:

Russia's economy hurt by sanctions, they are not an economic powerhouse

Economy is smaller than either Texas or New York State

Military death tolls is higher than Afghanistan

His thoughts on Brazil:

laowhy86 doesn't like Brazil's current leader Lula

Talks about currency merge with Argentina

New unpredictable leadership counter to what made Brazil great 

His thoughts on India:

India doesn't need BRICS

Balancing traditional support for Russia with increasing capitalist and nationalist policies

His thoughts on South Africa:

Corruption

Power outages

• BRICS Currency Union would be based on gold - which is traded in dollars and most countries store their gold in NY Federal Reserve's vault
• Every one of the BRICS countries has different goals
• Common monetary policy means same interest rates
• Where will the central monetary bank be located?
• Which country will have the biggest vote on monetary matters?
• How much foreign currency trade could actually replace the dollar?

Why Are We Hearing So Much About BRICS?  He thinks it's because most of the BRICS countries are in bad shape.  

"BRICS is Cringe" Analysis

A lot of items on laowhy86's list could apply to the United States, although not in the same degree.  I get his point, though.  Beating the "American is horrible" drum is a popular pastime for Americans who have never seen what horrible actually looks like.  In themselves, high unemployment, high levels of debt, trade wars and military death tolls do not equal a soon-to-be-failing state. 

A few of his points are valid and deserve further discussion.

Liquidity

If you can't get to your money, or convert it into something spendable where you live, then it's like a gift to the people who have it.  If you make a fortune but can't spend it, you have earned nothing.  

Currency conversion is essential for wealth created in one place to be spent somewhere else. The harder it is to convert your BRICS-a-roni to Euro, the less value the currency will have.

Chinese limits on transferring wealth out directly impacts the liquidity of its currency, and by extension, the currency liquidity of BRICS. 

Corporations Moving Out of China

Brazil has lots of international corporations manufacturing products there.  That doesn't seem to be changing despite laowhy86's disapproval of Brazil's current leader, Lula.  I won't even start with that topic.  It is enough to say he isn't pointing to any concrete examples of businesses abandoning Brazil.

China is a different story.  Corporations are leaving China for other Asian countries, leading to unemployment and less need for China's currency.  That's a big deal in terms of providing the liquidity needed for a reserve currency that replaces the dollar.  So, no worries for America there.

The U.S. Navy

I never hear economic analyses that mention shipping trade routes.  See, all these products manufactured all over the world need to arrive safely on ships.  Those shipping lanes need to be safe.  They are kept safe by the U.S. Navy.

The Chinese navy, the Brazilian navy, the Russian navy, the South African navy and the Indian  navy cannot protect the international shipping lanes.  Only the U.S. can do that.  More than anything else, that is why the United States' dollar is the reserve currency.  Because global trade needs us.

Gold

The United States keeps gold reserves safe for many countries by guarding it in the United States.  If you want to get the gold in your hands, you will have to invade.  Enough said.

Final Thoughts on BRICS Ascendant Messaging

Every few years we hear the same fodder:  America is failing, other countries are taking over, America is in decline.  The message takes various forms:  civil liberties are under attack, our "way of life" is under attack, other countries don't respect us anymore, the United States has done terrible things, etc.  I think the American character has a strong self-flagellation streak inherited from the Puritans.  

When a wide variety of media outlets are trending the same message, you have to be suspicious.  When they are repeatedly recycling that message and are always wrong, you have to be dubious.  When they've got nothing good to say, turn it off.

See, flowers and manure go together.  If there's not one good thing in what you're saying, you are not credible.