WEBVTT 00:00:00.000 --> 00:00:02.529 Welcome to the Deep Dive! Today, we're plunging 00:00:02.529 --> 00:00:04.710 into something, well, pretty monumental, really. 00:00:04.849 --> 00:00:08.330 It's the accelerated push by BRICS nations to 00:00:08.330 --> 00:00:11.349 rely less on the U .S. dollar for trade and finance. 00:00:11.890 --> 00:00:14.289 We've got some fresh source material right from 00:00:14.289 --> 00:00:18.030 today, August 8th, 2025, that details these these 00:00:18.030 --> 00:00:20.149 big shifts. So our mission here is to really 00:00:20.149 --> 00:00:24.010 unpack what de -dollarization means now in 2025, 00:00:24.149 --> 00:00:27.530 why it's picking up so much steam and what the 00:00:27.530 --> 00:00:29.870 surprising fallout might be for the whole global 00:00:29.870 --> 00:00:31.910 money system. Yeah. And what's fascinating here 00:00:31.910 --> 00:00:34.170 is just the range of things happening all at 00:00:34.170 --> 00:00:36.590 once. You've got Russia planning this new independent 00:00:36.590 --> 00:00:39.390 gold exchange, which is, well, a very direct 00:00:39.390 --> 00:00:41.289 move. Then there's record Chinese gold demand, 00:00:41.630 --> 00:00:44.149 and even this quieter trend of central banks 00:00:44.149 --> 00:00:47.049 buying gold straight from their own miners. It's 00:00:47.049 --> 00:00:48.969 a lot happening, all pointing in a similar direction. 00:00:49.179 --> 00:00:51.659 OK, let's unpack this term then, de -dollarization. 00:00:51.840 --> 00:00:54.039 Most of you listening probably know it, but just 00:00:54.039 --> 00:00:57.159 quickly. It's basically the process where countries 00:00:57.159 --> 00:00:59.960 actively, systematically try to use the US dollar 00:00:59.960 --> 00:01:03.380 less. Less in trade, less in finance, even less 00:01:03.380 --> 00:01:06.480 in their national savings, their reserves, moving 00:01:06.480 --> 00:01:09.920 away from it as the main global currency. Exactly. 00:01:10.219 --> 00:01:12.700 And it's not just talk, right? It involves some 00:01:12.700 --> 00:01:15.219 complex methods. We're seeing more bilateral 00:01:15.219 --> 00:01:17.359 currency deals, countries trading directly in 00:01:17.359 --> 00:01:20.010 their own money. plus the development of totally 00:01:20.010 --> 00:01:22.909 new payment systems to sort of bypass the usual 00:01:22.909 --> 00:01:25.569 routes and definitely more use of things like 00:01:25.569 --> 00:01:28.750 gold for settling international accounts. Historically, 00:01:28.750 --> 00:01:30.349 this isn't totally new. If you look back, the 00:01:30.349 --> 00:01:32.709 British pound used to be dominant. Its decline 00:01:32.709 --> 00:01:34.969 after World War II shows that, well, these things 00:01:34.969 --> 00:01:36.930 can change. Reserve status isn't forever. It 00:01:36.930 --> 00:01:38.930 evolves. Right. And for you wondering, you know, 00:01:39.189 --> 00:01:41.030 how does a currency get to be the reserve currency 00:01:41.030 --> 00:01:43.700 anyway? Economic theory. points to a few key 00:01:43.700 --> 00:01:47.760 things. It's about economic size, political stability, 00:01:48.120 --> 00:01:50.379 how deep and liquid the financial markets are, 00:01:50.400 --> 00:01:53.379 and really importantly, international trust in 00:01:53.379 --> 00:01:56.780 institutions. So shifting to BRICS specifically, 00:01:57.340 --> 00:02:01.760 that 17th summit in Rio, that was quite a significant 00:02:01.760 --> 00:02:03.819 milestone for their financial independence goals. 00:02:04.239 --> 00:02:06.099 It really built on talks from the Kazan summit 00:02:06.099 --> 00:02:08.639 back in October 2024. That's where they started 00:02:08.639 --> 00:02:10.520 mapping out things like the BRICS pay system 00:02:10.520 --> 00:02:13.210 to help members trade. using their own currencies. 00:02:13.409 --> 00:02:14.830 Okay, here's where it gets really interesting 00:02:14.830 --> 00:02:16.969 for me, maybe a bit unexpected. The members in 00:02:16.969 --> 00:02:19.569 Rio, they talked explicitly about moving away 00:02:19.569 --> 00:02:21.710 from dominant reserve currencies, that's the 00:02:21.710 --> 00:02:24.050 phrase they used, and pushing instead for deals 00:02:24.050 --> 00:02:26.550 based on their own national currencies, their 00:02:26.550 --> 00:02:29.849 stated goal. Less dependence on traditional Western 00:02:29.849 --> 00:02:32.210 financial infrastructure. It sounds like a united 00:02:32.210 --> 00:02:35.430 front, but is it really? How unified are they 00:02:35.430 --> 00:02:37.969 on the how? That's a great question. And it reveals 00:02:37.969 --> 00:02:40.849 something quite nuanced. The goal might be shared, 00:02:40.849 --> 00:02:43.150 but the approach is pretty individualized. Take 00:02:43.150 --> 00:02:46.270 Brazil, for example. During their 2025 presidency, 00:02:46.810 --> 00:02:49.150 they've really focused on promoting local currency 00:02:49.150 --> 00:02:52.310 trade deals, not so much pushing for one single 00:02:52.310 --> 00:02:55.110 bricks currency that reflects practical issues 00:02:55.110 --> 00:02:57.509 and respect for each member's monetary control. 00:02:58.090 --> 00:03:00.610 India, too, has been clear publicly. They say 00:03:00.610 --> 00:03:03.069 it's not about weakening the dollar per se. It's 00:03:03.069 --> 00:03:05.330 more about gaining financial autonomy, reducing 00:03:05.330 --> 00:03:07.530 exposure to, say, U .S. Federal Reserve decisions. 00:03:08.409 --> 00:03:11.110 So this individual -nation approach gives them 00:03:11.110 --> 00:03:13.310 flexibility. Each country moves at its own speed, 00:03:13.650 --> 00:03:15.370 trying to avoid big economic shocks. It's more 00:03:15.370 --> 00:03:17.770 about resilience, maybe, than direct confrontation. 00:03:18.229 --> 00:03:20.409 OK. So building on the different approaches from 00:03:20.409 --> 00:03:24.449 Brazil, India, let's look at Russia. Their strategy 00:03:24.449 --> 00:03:27.800 seems particularly, well, bold. especially on 00:03:27.800 --> 00:03:29.620 gold. They've got these concrete plans launching 00:03:29.620 --> 00:03:31.719 gold trading on the St. Petersburg exchange by 00:03:31.719 --> 00:03:35.620 year end 2025. That's a direct shot at the London 00:03:35.620 --> 00:03:38.159 centered system, the LBMA, right? The London 00:03:38.159 --> 00:03:40.580 Bullion Market Association, which pretty much 00:03:40.580 --> 00:03:43.439 sets the global gold price benchmarks. Russia 00:03:43.439 --> 00:03:45.360 wants to disrupt that. And it matters because 00:03:45.360 --> 00:03:47.939 Russia is what? The world's second biggest gold 00:03:47.939 --> 00:03:51.280 producer. After China. Yeah, exactly. This raises 00:03:51.280 --> 00:03:53.479 an important question. What's the main goal there 00:03:53.479 --> 00:03:55.639 beyond just challenging London? They've said 00:03:55.639 --> 00:03:57.439 they want to create a competitive market price 00:03:57.439 --> 00:04:00.159 for gold separate from those traditional benchmarks. 00:04:00.539 --> 00:04:03.039 And this comes after years of, let's say, criticism, 00:04:03.419 --> 00:04:05.699 even legal action against traders over suspected 00:04:05.699 --> 00:04:08.000 manipulation in metals markets. So there's a 00:04:08.000 --> 00:04:10.539 context. What this new exchange allows is for 00:04:10.539 --> 00:04:13.039 Russian gold buying to directly influence the 00:04:13.039 --> 00:04:15.000 global spot price, something they couldn't really 00:04:15.000 --> 00:04:17.300 do effectively back in the Soviet era. It's about 00:04:17.300 --> 00:04:18.800 getting a seat back at the price. by setting 00:04:18.800 --> 00:04:21.060 table for a key asset. And it's not just the 00:04:21.060 --> 00:04:23.420 market, is it? Russia's also focused on the physical 00:04:23.420 --> 00:04:26.160 side, holding the actual gold. That's interesting. 00:04:26.680 --> 00:04:28.959 Unlike lots of countries storing gold in London 00:04:28.959 --> 00:04:31.600 or New York, Russia keeps its reserves at home 00:04:31.600 --> 00:04:34.199 in domestic vaults. They see it as, well, giving 00:04:34.199 --> 00:04:36.319 them more direct control, making them less vulnerable 00:04:36.319 --> 00:04:39.139 to sanctions or having assets frozen. Russian 00:04:39.139 --> 00:04:41.240 officials literally call it an important step 00:04:41.240 --> 00:04:43.680 towards de -dollarization and financial independence 00:04:43.680 --> 00:04:47.220 from currencies from unfriendly countries. It's 00:04:47.220 --> 00:04:50.399 like building economic defenses. Precisely. And 00:04:50.399 --> 00:04:52.060 it's a strategy, frankly, more governments might 00:04:52.060 --> 00:04:53.939 be thinking about given how finance has been 00:04:53.939 --> 00:04:57.079 used as a tool or weapon recently. Now looking 00:04:57.079 --> 00:04:59.579 broader globally, World Gold Council data shows 00:04:59.579 --> 00:05:01.959 something pretty striking. 53 % of central banks 00:05:01.959 --> 00:05:03.860 that have local gold production are now buying 00:05:03.860 --> 00:05:06.459 directly from small scale miners. That's up massively 00:05:06.459 --> 00:05:08.959 from just 25 % last year. You see countries like 00:05:08.959 --> 00:05:11.459 Colombia, Tanzania, Zambia, Mongolia, Ecuador, 00:05:11.620 --> 00:05:13.519 the Philippines all doing this. And the reasons 00:05:13.519 --> 00:05:16.920 they give. Lower costs, boosting domestic refining. 00:05:17.209 --> 00:05:19.670 getting discounts on direct buys, and interestingly, 00:05:19.949 --> 00:05:22.610 fewer international reporting rules. A bit more 00:05:22.610 --> 00:05:25.069 discretion. Perhaps. And it's not just buying. 00:05:25.230 --> 00:05:26.990 It's where they're keeping it to. Right. The 00:05:26.990 --> 00:05:31.029 storage is shifting. In 2025, 59 percent of central 00:05:31.029 --> 00:05:33.310 banks said they store gold domestically. That's 00:05:33.310 --> 00:05:36.810 up from 41 percent in 2024. Although, interestingly, 00:05:36.889 --> 00:05:38.769 the Bank of England is still the top spot for 00:05:38.769 --> 00:05:40.790 those who do store abroad. Sixty four percent 00:05:40.790 --> 00:05:43.389 of them use London. But that domestic trend is 00:05:43.389 --> 00:05:45.550 clear. Now, China. We have to talk about China's 00:05:45.550 --> 00:05:47.529 role. It's pivotal and frankly kind of jaw dropping. 00:05:47.709 --> 00:05:50.310 The first half of 2025 saw just unprecedented 00:05:50.310 --> 00:05:53.139 activity in their gold market. ETF demand. exchange 00:05:53.139 --> 00:05:55.779 traded funds shot up about 400 % compared to 00:05:55.779 --> 00:05:57.740 the average over the last decade. Wow, 400%. 00:05:57.740 --> 00:06:00.439 That's huge. And this massive buying spree is 00:06:00.439 --> 00:06:02.720 seen as the main reason gold prices have climbed 00:06:02.720 --> 00:06:04.779 so much over the past 18 months. It's really 00:06:04.779 --> 00:06:06.500 shifting the market center of gravity. Yeah, 00:06:06.500 --> 00:06:07.959 what's really fascinating here is how this marks 00:06:07.959 --> 00:06:10.500 a fundamental shift in global demand. You know, 00:06:10.660 --> 00:06:12.980 historically, big gold rallies, bull markets 00:06:12.980 --> 00:06:15.279 were often driven by Western buyers, Western 00:06:15.279 --> 00:06:18.560 sentiment. But now... The current dynamics clearly 00:06:18.560 --> 00:06:21.660 show emerging economies, especially China, taking 00:06:21.660 --> 00:06:24.319 the lead in setting the price. This arguably 00:06:24.319 --> 00:06:26.680 improves global price discovery, makes the market 00:06:26.680 --> 00:06:29.040 deeper, and ultimately means Western influence 00:06:29.040 --> 00:06:31.459 on gold prices just isn't what it used to be. 00:06:31.899 --> 00:06:34.060 So the flip side then, how is the U .S. reacting 00:06:34.060 --> 00:06:36.660 to all this activity? Well, the Trump administration 00:06:36.660 --> 00:06:39.060 has responded pretty strongly, actually, with 00:06:39.060 --> 00:06:41.480 trade measures aimed at BRICS. They've announced 00:06:41.480 --> 00:06:43.699 10 percent tariffs on all BRICS members, and 00:06:43.699 --> 00:06:45.759 there are reports suggesting threats of much 00:06:45.759 --> 00:06:48.879 higher tariffs, like 100, even 150 percent, if 00:06:48.879 --> 00:06:51.439 these de -dollarization moves keep going. The 00:06:51.439 --> 00:06:54.920 administration frames these BRICS actions as 00:06:54.920 --> 00:06:57.399 deliberately targeting U .S. economic interests. 00:06:58.040 --> 00:07:00.300 They've described the group as set up to hurt 00:07:00.300 --> 00:07:02.980 us and designed to, quote, degenerate our dollar 00:07:02.980 --> 00:07:05.670 and take it off as the standard. Right. And we 00:07:05.670 --> 00:07:07.389 connect this to the bigger economic picture. 00:07:08.430 --> 00:07:10.949 Well, standard analysis suggests tariff costs 00:07:10.949 --> 00:07:13.810 usually get passed on, passed on to domestic 00:07:13.810 --> 00:07:16.769 consumers, businesses, meaning Americans likely 00:07:16.769 --> 00:07:19.550 pay more. So this kind of approach raises worries 00:07:19.550 --> 00:07:21.870 about, you know, potentially slowing down global 00:07:21.870 --> 00:07:23.790 growth, creating more uncertainty for businesses. 00:07:24.149 --> 00:07:25.889 And you have to wonder about the strategy. While 00:07:25.889 --> 00:07:28.800 it's presented as defensive, Historical research 00:07:28.800 --> 00:07:31.139 does suggest trade restrictions can sometimes 00:07:31.139 --> 00:07:33.540 escalate things, potentially leading to broader 00:07:33.540 --> 00:07:37.000 conflicts. Less economic cooperation often means 00:07:37.000 --> 00:07:40.050 more geopolitical friction. Okay, let's try and 00:07:40.050 --> 00:07:41.569 pull all these different threads together. What 00:07:41.569 --> 00:07:43.810 does this all mean for the global financial system? 00:07:44.170 --> 00:07:46.110 It really looks like these developments signal 00:07:46.110 --> 00:07:49.509 a potential move towards maybe a multipolar monetary 00:07:49.509 --> 00:07:52.029 system, challenging that dollar -centric setup 00:07:52.029 --> 00:07:54.490 we've had since the 1970s after Bretton Woods 00:07:54.490 --> 00:07:57.430 fell apart, the system that really cemented the 00:07:57.430 --> 00:08:00.060 dollar's top spot. Indeed. And the rise of these 00:08:00.060 --> 00:08:02.259 alternative trading systems, alternative pricing 00:08:02.259 --> 00:08:04.920 centers like the Russian gold exchange, it could 00:08:04.920 --> 00:08:07.480 genuinely reduce the control Western institutions 00:08:07.480 --> 00:08:09.379 have had over the plumbing of global finance. 00:08:10.160 --> 00:08:12.399 What's interesting is that more competition between 00:08:12.399 --> 00:08:14.759 financial centers usually leads to better price 00:08:14.759 --> 00:08:17.000 discovery, maybe less room for manipulation. 00:08:17.779 --> 00:08:20.100 That's a potential upside. It kind of mirrors 00:08:20.100 --> 00:08:22.779 history, where financial innovation often comes 00:08:22.779 --> 00:08:26.389 from competitive pressure. Expert views differ, 00:08:26.389 --> 00:08:28.810 of course. Some economists see it as a natural, 00:08:29.029 --> 00:08:31.269 maybe even healthy, evolution towards a more 00:08:31.269 --> 00:08:33.610 balanced global system, potentially more stable 00:08:33.610 --> 00:08:35.929 in the long run by spreading risk away from just 00:08:35.929 --> 00:08:39.009 one currency's policies. Others worry about instability 00:08:39.009 --> 00:08:41.970 during the transition. It's bumpy. And you absolutely 00:08:41.970 --> 00:08:43.990 have to see it in the geopolitical context, too. 00:08:44.230 --> 00:08:46.570 These financial shifts often mirror bigger power 00:08:46.570 --> 00:08:48.509 shifts, and there are strategic responses to 00:08:48.509 --> 00:08:51.139 things like sanctions. Central banks diversifying. 00:08:51.360 --> 00:08:53.399 That's just pragmatic risk management in this 00:08:53.399 --> 00:08:56.100 environment. Hedging their bets, reducing reliance 00:08:56.100 --> 00:08:58.720 on anyone's system. And we should remember these 00:08:58.720 --> 00:09:01.700 new systems face hurdles in the short term. Big 00:09:01.700 --> 00:09:04.580 technical challenges, regulatory issues. Whether 00:09:04.580 --> 00:09:06.779 markets actually adopt them really depends on 00:09:06.779 --> 00:09:09.379 if they prove reliable, convenient for businesses 00:09:09.379 --> 00:09:12.179 doing global trade. Exactly. Looking further 00:09:12.179 --> 00:09:15.340 out. long -term, the potential emergence of a 00:09:15.340 --> 00:09:18.259 truly multipolar monetary system. That could 00:09:18.259 --> 00:09:20.360 fundamentally change how global trade gets settled. 00:09:20.960 --> 00:09:23.100 A transition period might be volatile, involve 00:09:23.100 --> 00:09:25.679 coordination problems as markets adjust, but 00:09:25.679 --> 00:09:28.120 multiple reserve currencies could, theoretically, 00:09:28.620 --> 00:09:30.659 offer more stability by diversifying systemic 00:09:30.659 --> 00:09:33.259 risk. Ultimately though, the dollar's ongoing 00:09:33.259 --> 00:09:35.200 role probably depends on things like relative 00:09:35.200 --> 00:09:37.360 economic strength, policy stability here in the 00:09:37.360 --> 00:09:39.179 U .S., and whether these alternatives become 00:09:39.179 --> 00:09:42.139 truly credible and widely used. Wow, okay, what 00:09:42.139 --> 00:09:44.679 a deep dive that was. We've covered a huge shift 00:09:44.679 --> 00:09:47.860 unfolding in global finance, driven by BRICS 00:09:47.860 --> 00:09:50.519 nations with gold playing this increasingly central 00:09:50.519 --> 00:09:52.200 role. And these are just, you know, abstract 00:09:52.200 --> 00:09:55.059 theories. These are concrete actions with real 00:09:55.059 --> 00:09:57.379 global consequences. So here's a final thought 00:09:57.379 --> 00:09:59.919 for you to chew on. If reserve currency status 00:09:59.919 --> 00:10:02.379 depends not just on economic power, but fundamentally 00:10:02.379 --> 00:10:05.419 on trust, how might today's shifting geopolitics, 00:10:05.539 --> 00:10:07.419 this drive for financial independence affect 00:10:07.419 --> 00:10:09.740 the very foundation of trust needed for any new 00:10:09.740 --> 00:10:12.200 global financial systems to really take root 00:10:12.200 --> 00:10:14.379 and offer stable alternatives for the long haul.