Paul Kennedy's book "The Rise and Fall of the Great Powers", published in 1987, attracted my attention at the time. For those of you who have not read it, let me summarize very briefly: Paul Kennedy's book covers a wide period of time, from the Habsburg Empire in western Europe to the United States today and the recently disintegrated Soviet Union, in which he comprehensively examines how the economic and military power of the great powers in world history developed and ultimately collapsed. Kennedy examines in detail the dynamics of the economic and military capacity of great powers and how these dynamics led to major geopolitical shifts. The book categorizes world history from the 1500s onwards into five main periods: The Renaissance and the Age of Exploration, the Napoleonic Wars and the Industrial Revolution, the Rise and Fall of the British Empire, Period Between the Two World Wars and the Cold War. In analyzing the economic and military resources, strategies and policies of the great powers during these periods, Kennedy ultimately argues that great powers must constantly balance their economic and military resources, and that powers that fail to do so inevitably collapse. Naturally, it also draws important lessons from history on how modern great powers (e.g. the United States) should prepare for future challenges. In summary, this book helped me understand the historical dynamics of economic and military power and the need for great powers to think strategically to ensure their sustainability. If anyone has not read it yet, I highly recommend it.
In the 20th century, many empires and states collapsed. The Chinese Empire, the Austro-Hungarian Empire, the Ottoman Empire, the Japanese Empire, the Russian Tsardom, Germany and finally Soviet Russia in 1991. Add to this the British Empire, the Portuguese Empire, the French Colonial Empire, the Italian Empire, etc., which were largely dismembered by the decolonization process, and the number of empires and states that collapsed is even greater. In addition to liberation movements, economic instability, political corruption and social inequality were also factors behind the collapse of these empires. A similar scenario is now likely to play out in the United States. The US's unsustainable debts and failing banks, combined with the states' discovery of modern imperialism and the efforts of China, Russia and the BRICS countries to reduce their dependence on the dollar, will cause the US dollar to lose its role as the world's reserve currency. This is the basis of the analysis and resolve we will make in this article.
I should point out that this article is actually quite long and could have been published in 3-4 separate articles. However, in order to make a holistic analysis, I had to gather together topics that have organic ties with each other. Otherwise, both the analysis and the conclusions would have been baseless. Therefore, I ask for some patience from our esteemed readers, but I ask them to read to the end without skipping the topics in order not to disrupt the holistic analysis.
Inflation expectations in the world economy
First of all, it would be useful to take an overview of global economic problems. With the recent turmoil in the US economy, many economists feel the need to warn the public, something that has not been the norm for the last 70 years. Perspectives for the near future reveal that high inflation and global economic uncertainties require investors to develop asset protection strategies.
The current state of the world economy shows that debt levels across the globe have reached an unsustainable level. This is justified if we realize that the total global debt has reached 300 trillion dollars and that many countries have debt levels in relation to GDP above 100%. These high debt levels are the result of low interest rates. Low interest rate policies by central banks lead to excessive borrowing by individuals, but perhaps more importantly by governments. It seems almost inevitable that this will eventually lead to a currency crisis and currency depreciation.
It is clear that the dollar risks losing its status as the global reserve currency, which would have major implications for the US economy. It was already known that the dollar's status as a reserve currency allowed the US to borrow more from other countries, but that this situation was unsustainable. It is clear that a devaluation of the dollar would severely reduce the standard of living in the US, and the consequences for the US would be far more dire than a nuclear attack.
However, we know that the Eurozone is also facing serious economic problems. Debt levels in the euro area are high and it is difficult for the European Central Bank to force governments to reduce budget deficits. This means that the future of the Euro is uncertain and some countries may leave the Euro. This situation seems to have become even more pronounced with the aging European population and rising energy costs as a result of the Russia-Ukraine war. This situation in Europe, the closest ally of the US, is also of great concern for the US economy and the dollar.
US economic manipulations and the fake dollar empire
Let us take a brief look at the history of the US dollar becoming the world's reserve currency and, so to speak, establishing hegemony in the world. The US dollar became the world's reserve currency after World War II with the Bretton Woods agreement (more precisely, with US imposition!!!). This system was based on backing the dollar with gold and pegging other currencies to the dollar. In 1971, when the US abruptly abandoned the gold standard, the dollar became the fiat money currency. As is well known, the US dollar is still the most widely used currency in world trade. Especially the fact that oil trade is carried out in dollars has provided the US central bank with incredible advantages.
When we analyze the national debt of countries, the US economy appears to be heading off a cliff. If any other country faced a debt burden of this magnitude, it might have to be described by rating agencies in the last letters of the alphabet. But the world reserve currency, which has been the mainstay of the US economy for years, and the manipulations that have been carried out allow for the continuation of the rampant borrowing without an inflationary spike. But it is now becoming clear that this economic data is misleading and that the recession has already begun. The US government is trying to hide the situation by publishing false economic data. As in the 2008 crisis, for example, they admitted it a year after the recession began. Today, factory orders are falling sharply, which weakens the argument for a strong economy.
The Biden administration is blamed for the mismanagement of the economy. Manipulations such as the correction of employment data prevent the public from understanding the real economic situation. On the other hand, US economists argue that the FED should not raise interest rates despite rising inflation. Instead, they point to the possibility of lowering interest rates and returning to quantitative easing. However, I believe that these policies will deepen economic problems rather than solve them, especially if the developments of recent years are not taken into account.
It should be noted that the record highs in gold prices are related to central banks buying gold instead of dollars. On the other hand, this situation reveals the fact that the world's central banks have lost their confidence in the dollar by buying gold. In addition, the depreciation of the dollar once again triggers the increase in gold prices. This could reduce the effectiveness of US financial sanctions and jeopardize the dollar's place as a reserve currency. But could other countries have noticed what is happening in the US economy? Let's analyze and see...
BRICS countries are looking for alternatives to the dollar's dominance. These countries are trying to reduce their dependence on the dollar by conducting their trade in local currencies. Putin states that the use of the dollar as a foreign policy tool is one of the biggest strategic mistakes made by the US. This situation causes BRICS countries to turn to alternatives such as gold instead of the dollar.
Turning our focus back to the US domestic economy, there are serious problems in the US housing market and economic life in general. High inflation, rising taxes and the cost of living are worsening people's economic situation. Instead of solving these problems, governments are pursuing policies that will worsen them. The FED's interest rate cuts and the return to quantitative easing are likely to further increase inflation and deepen economic problems. The housing market is suffering from low inventory and high prices. It is getting harder to build new homes and existing homeowners do not want to lose their low-interest mortgages. This is keeping house prices high in nominal terms. However, household debt continues to rise and people's economic situation is deteriorating. Unemployment rates appear to be low, but in fact many people are unable to find work or are forced into low-paying jobs out of necessity.
In addition to all this, the global economic recession and rising energy costs, especially in a climate of war, are deeply affecting Japan, the UK, Germany and other countries. Last year, the huge German economy posted a deficit for the first time in many years. It is certain that these countries will face economic difficulties due to the US policies that are fueling the war. The loss of the dollar's dominance as the US reserve currency could change the global economic balance, leading to a depreciation of the dollar and a weakening of US economic and financial power.
One way or another, the role of the US dollar as a reserve currency is in jeopardy and economic problems are deepening. Gold and other alternatives are already replacing the dollar. The BRICS countries and others are taking strategic steps against the dollar's dominance. The US's internal economic problems - high debt, inflation and low unemployment rates - threaten economic stability. In this context, economists say that individuals and businesses within the US need to adopt various strategies to protect themselves against global economic uncertainties, indicating that a massive tsunami wave is about to hit the shore.
But has this situation really been seen by US citizens or are they not aware of it? Let's talk a little bit about how the situation looks like in the US.
Many Americans pretend to be rich, but in fact spend deficit spending, just like the US government, resulting in high credit card debt, buy now, pay later, and so on. Given the US economic situation described above, things are really out of control. Recently, things have been getting worse for the US again after the economic collapse of 1930 and the economic depression is signaling. As the US enters the election year of 2025, it is at an all-time high level of borrowing. As mentioned above, during the Vietnam War, the US economy was in a serious depression and was going through a process similar to today. In 1971, President Nixon severed the link between the US dollar and gold, which meant that the FED could print money for free. Normally, in any other country, the issuance of free money would automatically lead to inflation and the cost of living. But for nearly 50 years the US has been issuing free money when it needs it, and the rest of the world has been grabbing this circulating money and using it in their international trade, especially in the oil trade. The biggest contributor to this situation was of course the US agreement with Saudi Arabia exactly 50 years ago and the introduction of the petrodollar. By forcing the OPEC countries to sell in dollars, the US fueled the world's need for dollars and put its own debts on the backs of the world's states. Thus, the FED could put as much money into circulation as it wanted, and in return, without causing inflation in the country, it would share all the debts with the world. This system has been the main guardian of the US dream for the last 50 years. Of course, this was not the only instrument the US used to spread its debt around the world. The Wall Street bond bubble, followed by the tech stock bubble, followed by the housing bubble, and so on, we poor people of the world have always been deceived, and we have always taken on the debts of the US people. When the countries of the world could not bear this burden in certain periods, they have always put the US debts on the shoulders of the people through devaluation, economic crises and political turmoil. As a result, the US dollar has hegemonized the world as a purely fiat currency with no basis in fact. To illustrate this correctly, the US government can be understood as having a credit card with unlimited spending limits and having others pay the bill, and with fiat currencies, whenever they need money, they print money and get what they need. But now that the governments of the world have woken up to this system, nobody wants to burden their poor people with the debts of the fat US people.
Since the 1980s, states that realized this and started to fight against it have been either revolutionized and ruled by US-controlled governments, or politicians who took a stand against it were assassinated. It is not widely known that Iraqi President Saddam Hussein and Libyan leader Muammar Gaddafi were among the first leaders who wanted to sell their oil without being dependent on the dollar. Today we don't even remember them. Why, because the American Petrodollar monster swallowed them up, ground them up, destroyed them and spat them out. Similarly, many assassinations in world politics are CIA-related. Even their own US presidents have been implicated. For example, President Kennedy was sacrificed because of the changes he wanted to make in the monetary system. Of course, that's not what our dear media people tell us. Because they are also important players and even defenders of this system.
So what do you do in the face of these antidemocratic fake revolutions or political murders? You are forced to either keep silent or wage war against them with your head on your shoulders. If the people are behind you, you have a chance to do something. But if you have sold-out politicians and bureaucrats or deceived people among your people, you have no chance of holding on. Examples? There are so many, most recently on 15 July 2016, when there was an assassination attempt against President Erdogan in Turkey and a coup d'état to remove the government. But the Turkish people resisted bravely. On Youtube you can still find footage of people standing in front of tanks with their bare hands and being crushed, videos of anti-aircraft bullets being fired from military helicopters at civilians, and videos of F16s attacking cities. Exactly 256 brave Turks were killed for resisting this uprising. Anyway, back to the topic at hand...
These games of the US have come to an end, people are waking up and seeing everything. They have realized that they are not going to get anywhere with political assassinations, artificial revolutions or sanctions on countries around the world. Don't they understand the backlash that all these countries will unite under by weaponizing the dollar? The whole world has realized that the mainstay of dollar hegemony is the petrodollar.
But unfortunately, we often don't learn the most important things in life until we are much further down the road. Or rather, the CIA, the guardian of this system, has prevented us from learning this. Whenever it needed to, the tyrannical US central bank was able to run its economy smoothly by printing money without the risk of the dollar devaluing, and it did so on the backs of the world's governments. But that's it now. The end of the US petrodollar empire is in sight.
What will happen if the US dollar ceases to rule? What will happen to the US economy and with it the American dream that it promised its people? These are the critical questions.
So let's go into a little bit deeper now...
BRICS Countries on the Path to De-Dollarization: A New Era in the Global Economy
BRICS countries are increasing their efforts to reduce their dependence on the US dollar in global trade and finance. This effort gained momentum with the inclusion of Saudi Arabia, Egypt, the United Arab Emirates, Iran and Ethiopia in BRICS from January 2024. This initiative, called de-dollarization, aims to develop a payment system independent of US financial control. This new system aims to reduce the geopolitical influence of the United States by facilitating international transactions.
The BRICS New Development Bank (NDB) aims to increase the capacity of member countries to lend in local currencies, with 30% of its lending in local auctions by 2024. This will reduce dependence on the dollar and mitigate risks associated with exchange rates and US monetary policy. By integrating more economies that can trade in local currencies, the enlarged BRICS, including major oil producers such as Saudi Arabia, is increasing its economic power and supporting the de-dollarization agenda.
The de-dollarization efforts of the BRICS represent a concerted effort to create a multipolar global financial system that challenges the hegemony of the US dollar. While the full impact of these measures will take time, de-dollarization marks a significant shift in global economic strategies. China has taken an important step in its dollarization strategy by selling about $50 billion of US bonds. This sale reflects China's long-term goal of diversifying its reserves and reducing its exposure to US financial instruments.
On the other hand, if we consider that the dollar bills in circulation in the world are actually bonds or promissory notes, the return of this money in circulation to the US and the demand for its equivalent would have a nuclear bomb effect on the US economy, which is already in deep trouble. Because, as we have explained above, there is no equivalent to this amount of money in circulation in the US!!! This situation is making the US economic bureaucrats sweat very seriously.
The ongoing geopolitical tensions between the US and China are triggering this strategic shift. Together with the BRICS countries, China is developing an alternative to the SWIFT payment system to facilitate international trade without being tied to the US dollar. Moreover, given the economic sanctions Russia is facing on a global scale, it can be easily understood that this will give a big boost to these developments. Moreover, the BRICS New Development Bank is expanding the capacity of member countries to lend in local currencies. Reduced demand for US bonds will lead to lower bond prices and higher interest rates. This inverse relationship occurs because when bond prices fall, yields or interest rates on those bonds rise to attract new investors. Higher interest rates increase the cost of borrowing across the economy, affecting various types of credit.
The massive debt problems in the US economy, the supply-demand imbalance in the bond market and uncertainties about the future course of interest rates are putting significant pressures on the US economic situation. Household borrowing and rising interest rates are expected to lead to economic tightening. A major risk is that the government will issue a large amount of bonds and there will not be enough investors to buy them.
The de-dollarization efforts of the BRICS are certain to potentially change the global economic balance of power. These efforts, coupled with the fact that the United States has the highest external debt in the world, will have a significant impact on the global economy. These BRICS initiatives could accelerate the transition to a multipolar global financial system and reduce dependence on the dollar. This could lead to a reshaping of global trade and finance and increase the economic power of the BRICS countries.
And what will be the response of the US economy? I don't think there is anyone who believes that they will calmly accept the situation. Also, can the US respond to the biggest uprising ever against it with its huge army? Or has this process already started? It doesn't take a clairvoyant to see that the US needs a war to get out of this cycle, and that they will stir up the world to get it.
The End of the Petro-Dollar Agreement and Its Global Implications
The 75-year petro-dollar agreement between Saudi Arabia and the United States expired on June 9, 2024. This is seen as a harbinger of major changes in the global economy. The petro-dollar system ensured that the US dollar remained the international reserve currency and led to global trade being conducted largely in dollars. The end of this system could lead to the end of the dollar's global economic dominance and a reshaping of world trade.
The petro-dollar system began with the US agreement with Saudi Arabia in the 1970s. In exchange for military protection and economic support to Saudi Arabia, the US ensured that oil sales would only be in dollars. This system helped strengthen the dollar as the global reserve currency and helped the US maintain its economic and political supremacy.
This system gave the US two important advantages: economic stability and financial advantages. The dollar's status as a reserve currency allowed international trade and investment to be conducted in dollars. It also reduced US borrowing costs, making its financial markets liquid and stable.
There are several reasons for the end of the petro-dollar deal. First, Saudi Arabia and other developing countries want to reduce dependence on the dollar and trade in their own currencies. This is a goal that is in line with the efforts of the BRICS countries to create an alternative reserve currency to the dollar.
Second, US global policies and economic sanctions have reduced other countries' reliance on the dollar. China and Russia, in particular, have taken major steps to reduce their dependence on the US dollar and have started to hold gold and other precious metals in their reserves instead of dollars.
If the agreement signed 50 years ago between the US and Saudi Arabia, which allows oil to be bought only in dollars, is not renewed and oil is sold in euros, yuan, gold or even Bitcoin, this could usher in a new era not only for the US and the dollar's dominance but also for the world financial order. Moreover, it would reduce the dollar's role in international trade, which would increase volatility in currency markets. Let's not forget that the depreciation of the dollar would mean higher import costs for the US economy, which would lead to higher inflation, which in the current circumstances would start an unstoppable cycle of collapse.
High inflation leads to higher interest rates and higher borrowing costs. This means higher interest rates on mortgages, car loans, student loans and credit cards. It can also increase pressure on the banking system, leading to more bank failures.
A depreciating dollar reduces US international purchasing power and competitiveness. Travel abroad and the prices of imported goods increase, raising the cost of living for American consumers. In addition, retirement accounts and investment portfolios are negatively affected.
The end of the petro-dollar system will reduce US influence in the Middle East and weaken US global economic dominance, which in turn will reshape the global economic order, reduce the role of the dollar in international trade, and ultimately remove the golden goose of the US economy. So how will the US economy, already under so much pressure, respond? How will the collapse be stopped?
It seems that the environment in which excessive deferred debts across the US suddenly become more difficult to repay could make the US citizenry look back to the Depression of the 1930s.
The Trend Away from the US Dollar as the Global Reserve Currency,
Alternative Currencies and the Value of the Dollar
Once the countries of the world started to question why they were using the US dollar in global trade and started to understand the realities, they started to look for alternatives to the US dollar. These countries are experimenting with trading using their own currencies and digital currencies. China's launch of the digital yuan can be seen as part of these efforts. With its digital yuan pilot program in Hong Kong, China aims to bypass the dollar in global trade.
In addition, all countries are questioning why they do not trade in their local currencies. With global distrust of the US, the prospect of throwing off the yoke of the dollar is a welcome one. Perhaps they feel the slap in the face of imperialism that they have been waiting for for years.
In conclusion, the loss of the US dollar as the global reserve currency will lead to major changes in the international financial system. The shift to alternative currencies by countries like China and Russia could devalue the dollar and deepen the US economic problems, which seems inevitable.
BRICS Countries' Efforts to Reduce the Impact of the Dollar
In response to the US weaponizing the dollar's dominance in the global financial system, the BRICS countries are seeking an alternative currency to replace the dollar. These countries are coming together to reduce dependence on the dollar and increase their own economic power. BRICS aims to create alternative trade methods that are not dependent on the dollar and a new reserve currency.
BRICS countries aim to create an alternative currency that is not dependent on the dollar to trade among themselves. In this context, the idea of creating a new reserve currency has come to the fore. This currency could be used in international trade by replacing the dollar and facilitate trade among BRICS countries.
BRICS countries are trying to become independent from the dollar by using their own currencies or valuable commodities such as gold and oil in their trade. This strategy was developed to reduce the effects of US economic sanctions and increase their financial independence.
BRICS countries organize various meetings and summits to ensure greater cooperation and coordination in the international arena. At these summits, common economic policies are developed and strategies to reduce the global influence of the US dollar are discussed.
Central banks can contribute to this transformation by changing their reserve allocation and using alternative currencies. The People's Bank of China is taking several steps to increase the international use of the yuan. The adoption of the yuan as an international reserve currency could weaken the role of the dollar in the global financial system and increase the financial independence of the BRICS countries. The Central Bank of Russia has also diversified part of its reserves into other currencies such as gold and the euro. This strategy is part of Russia's efforts to reduce the influence of the dollar and increase financial stability.
BRICS Digital Currency Announcement
Russia has announced the development of a digital currency for the BRICS countries. While there has been speculation that this new currency will be backed by physical assets such as gold and other commodities, the Kremlin has stated that the currency will be based on blockchain technology and is almost complete.
The BRICS countries are an economic bloc that collectively represents more than 3 billion people, and this size could have significant implications for global trade if a new common currency is adopted.
US Strategic Moves and the Digital Dollar
The US Federal Reserve (FED) is working on a digital dollar, but has not yet taken a definitive step. FED Chairman Jerome Powell has stated that the digital dollar could help the US maintain its role in the international financial system. However, China's digital yuan move could give it a huge competitive advantage over the US.
There is no doubt that the developments led by the BRICS countries are pushing countries to conduct world trade in their own currencies or alternative currencies in order to reduce dependence on the US dollar. This strategy is an important step towards building a multipolar economic order that challenges US global financial dominance.
At this point, let's take a look at the economic indicators and try to understand what these developments might affect;
BRICS is a geopolitical and economic bloc of 10 countries representing 45% of the world's population and 37% of world GDP. Its mission is to create a multipolar world order, both politically and economically, against the unjustified pressure of the US, EU, Japan and other Western powers. In this context, the BRICS countries are dissatisfied with the use of the dollar as a weapon and want to oppose this situation.
The US has been a dominant force in the world economy for many years, and this has been supported by its policies of money printing and borrowing. The US debt of more than $34 trillion has remained sustainable thanks to the willingness of the country's creditors around the world to buy it. However, if the BRICS countries decide to work to reduce dollarization, it is possible that these dollars will flow back to the US, potentially triggering a major economic crisis.
BRICS seeks to establish a rival financial system that mirrors the existing Western system. The BRICS New Development Bank is the equivalent of the West's International Monetary Fund (IMF). In addition, alternatives to the SWIFT payment system are being developed, such as the BRICS Pay. The BRICS global reserve currency is also part of this system and is planned to be backed by commodities such as gold and oil. This currency could potentially be blockchain-based, making it a digital central bank currency.
The BRICS countries, especially China, Russia and India, are rapidly increasing their gold reserves. This signals that the new BRICS currency may be backed by gold. In the last 18 months, China has increased its gold reserves, Russia has pegged the ruble to gold and India has increased its gold reserves by 40%. These developments indicate that the BRICS countries fear that the US dollar will fall or be used as a weapon against them.
If the 10 BRICS countries completely de-dollarize their economies, a money supply worth about $8.14 trillion could return to the US, with serious consequences for the US economy, including inflation, debt crisis and potential hyperinflation. Such an event could bring serious political and social instability to the US.
Bitcoin stands out as an interesting variable in this multipolar monetary order. Bitcoin cannot be controlled by any government or group and offers transparency, reliability and independence. Bitcoin is increasingly accepted worldwide as an alternative to fiat currencies and holds promise for the world that awakens to the reality of this monetary savior.
What are the obstacles to these developments?
BRICS countries are discussing the idea of creating a common currency, but there are significant obstacles to this. First of all, the economic and political differences between the countries make it difficult to create a unit like the Euro, and the expansion of BRICS, along with the increase in the number of members, complicates the ability to act collectively. The technical difficulties of creating a common currency and the sovereignty concerns of countries are also major obstacles.
Alternatively, a basket currency similar to the IMF's SDR or blockchain-based payment systems have been proposed. However, both options have their own challenges; for example, with a basket currency, economic imbalances between countries are a political constraint. Blockchain-based systems, on the other hand, are not yet fully developed and there are uncertainties in their implementation.
Criticism of the BRICS in the international system may affect the international acceptance of a common currency or payment system. The international trust-based acceptance of such a unit or system is based on political and economic power.
The BRICS currency will most likely be digital and blockchain-based. It is still unclear whether it will be backed by gold. It aims to be a broadly inclusive currency that can be used not only for intergovernmental transactions but also for trade between individuals. However, the adoption and implementation of this currency may involve challenges due to political and economic differences between member countries. India, in particular, may have to abandon its goal of strengthening its own currency.
On the other hand, the official launch of the digital yuan is seen as China's strategy to counter US sanctions. As it is known, the launch took place in Hong Kong, from where it is planned to spread around the world.
Immediately after this development, US officials expressed their reactions against China's move. US Treasury Secretary Janet Yellen and Secretary of State Antony Blinken stated that China would face sanctions if it did not stop its support for Russia. The US has indicated that it may block dollar transactions by Chinese banks, targeting their financial institutions. This creates the need for China to establish an alternative financial system to neutralize US sanctions.
Under a pilot program launched in Hong Kong, digital yuan wallets can be opened at major Chinese banks and used to make direct payments to merchants in mainland China. Major Chinese banks such as Bank of China and ICBC Bank have already integrated this program. This system provides a hedge against US sanctions by making transactions more confidential and difficult to trace.
As the largest trading partner of more than 100 countries worldwide, China is a major economic power. The adoption of the digital yuan could increase China's economic clout and change the dynamics of global trade. As the use of the digital yuan increases, central banks could hold fewer dollars in their reserves, which could further devalue the dollar.
Turkey's Accession to BRICS
Turkey's interest in multipolar world systems such as BRICS+ is growing. The importance of BRICS+ was emphasized during Foreign Minister Hakan Fidan's visit to Moscow. The term BRICS+ refers to an expanded structure formed by the possible addition of new members to BRICS. This structure emerged as a reaction against the hegemony of international financial institutions and creditors.
BRICS emerged in 2006 with the contacts of Brazil, Russia, India, India and China at the UN sessions and was officially established in 2009. It was renamed BRICS in 2011 with the accession of South Africa. This grouping emerged as an opposition to the injustices of the global economic and political system and aims to be an alternative to Western-centered international institutions.
BRICS countries complain of under-representation in institutions such as the IMF and the World Bank and of injustices in the international financial system. This has become particularly pronounced in the wake of global economic crises and trade imbalances.
The BRICS+ concept refers to an expanded structure with countries such as Saudi Arabia, Egypt, the UAE, Ethiopia and Iran joining BRICS. Countries like Turkey, located at the intersection of global trade routes, should not be considered in isolation and may seek a more effective representation in the international system. Turkey's participation in BRICS+ could strengthen its foreign policy and economically enable it to take a stronger stance against international financial manipulations.
As a NATO member that has been waiting for decades for European Union (EU) membership, Turkey is seriously considering joining the BRICS grouping. Turkish Foreign Minister Hakan Fidan expressed his desire to join BRICS during his visit to China and the issue was discussed at a meeting of BRICS foreign ministers on June 10-11. Given the opposition of some European countries to Turkey's accession to the EU, Turkey sees joining BRICS as an alternative integration platform.
Turkey's participation in BRICS offers many economic and political advantages. BRICS offers a viable alternative for member countries and this platform emphasizes Turkey's great potential and scope. It is well known that Turkey is a member of NATO, is in a customs union with the EU and applied to join the European Economic Community 40 years ago. However, negotiations on Turkey's EU membership have long been stalled due to contentious issues such as human rights and foreign policy.
The United States and Western allies have expressed concern about Turkey's relations with Russia. In this context, Dmitry Peskov, the Russian President's public relations chief, stated that Turkey's interest in BRICS is welcome. However, the organization is unlikely to accept all 30 countries and therefore Turkey's membership is not guaranteed.
BRICS is a platform open to countries seeking a different political and economic system. Membership is based on the principles of sovereignty and equality of countries. Turkey's accession to BRICS will strengthen its economic ties with the Commonwealth of Independent States (CIS) countries in Central Asia and connect it with China, Iran and India through projects such as the Belt and Road Initiative and the North-South Transport Corridor.
BRICS offers a huge market and Turkish products are welcomed in this market. Turkey's accession to BRICS will boost the country's economic potential and strengthen its strategic position in the region. As a country with NATO's second largest army, Turkey is looking for alternatives due to the delay in joining the EU.
The expansion of BRICS offers new opportunities for countries like Turkey. Turkey's accession to the BRICS will not completely cut its relations with the US and the EU, but rather diversify its economic and trade relations. Turkey's geographical location at the crossroads of Europe and Asia gives it a strategic advantage.
In conclusion, Turkey's accession to BRICS could be a step forward to help the country realize its economic and political goals. BRICS membership would increase Turkey's regional and global influence and open up new trade and cooperation opportunities. While this does not mean that Turkey has abandoned its pursuit of EU membership, it shows that BRICS as an alternative integration platform is an attractive option.
Now let's take a look at the Turkish economy, which will add strength to BRICS.
The last two decades of the Turkish economy
In the mid to late 2000s, Turkey stood out as one of the fastest growing economies in the world. During this period, important steps were taken to fight inflation and new legislation gave the central bank more authority to ensure price stability. A new currency, the Turkish lira, replaced the old currency, which had lost value due to hyperinflation. These changes played an important role in bringing inflation under control.
Turkey's economic growth was supported by massive investment in industry, education and international trade. The country was geographically located as a bridge between the consumer markets and advanced industries of Europe and the natural resource wealth of the Middle East and Russia. This strategic location made Turkey attractive to both local and international investors.
However, Turkey's rapid economic growth did not last long. In 2013, after economic output peaked, the country entered a period of slow decline. During this period, the value of the Turkish lira began to fall steadily. The central bank was reluctant to raise interest rates for fear of hampering growth. The depreciating currency had a negative impact on Turkey's economic growth and inflation started to rise again. It is indeed remarkable that the downturn in the Turkish economy and the economic difficulties coincided with the political problems and the clash with US policies. Whenever Turkey tries to pursue national and independent policies, economic problems immediately follow!
Inflation and the massive depreciation of the Turkish lira have become the country's biggest major problem for the last five years. In 2005, the new currency replaced the old Turkish lira, which had depreciated due to hyperinflation. This process led to the fact that economists and participants of the economy began to consider this situation as a systemic problem.
The attempted coup in 2016 exacerbated political instability in Turkey. This event made foreign investors concerned about developments in Turkey and hesitant to invest. A year later, in a referendum motivated by the coup attempt, the country amended its constitution to give more power to the head of state, which indirectly meant that the new president could have much more control over issues such as interest rates.
These developments accelerated the depreciation of the Turkish lira and caused inflation rates to rise. The government put pressure on the central bank to keep interest rates low, which caused inflation to rise as high as 80%. This led to a major crisis, especially because of its negative effects on the working class.
On the other hand, it is also a fact that the Turkish economy is seriously manipulated from outside. In the 20th and 21st centuries, it is no secret that the economy is used as a tool of war between countries. Each country applies economic manipulations to countries that it sees as rivals, that it thinks are acting against its interests or that it is trying to exert political pressure on. Countries that realize this are known to take a front against these manipulations and try to protect themselves. Just like the current struggle of the BRICS to eliminate the dollar hegemony, or to put it more accurately, the whole world is trying to hunt the vampire feeding on its veins. Let's get back to our topic.
Based on the last 80 years, we know that countries have used various strategies to manipulate their competitors economically. These strategies can be through economic pressure, sanctions, trade barriers, currency manipulation, forcing high inflation, devaluation of the country's currency or other economic instruments.
The following examples illustrate that Turkey has been subjected to such economic manipulation at various times in the last 80 years. The lessons Turkey has learned from these processes play an important role in shaping its economic policies today.
US economic manipulations and the fake dollar empire
Let us take a brief look at the history of the US dollar becoming the world's reserve currency and, so to speak, establishing hegemony in the world. The US dollar became the world's reserve currency after World War II with the Bretton Woods agreement (more precisely, with US imposition!!!). This system was based on backing the dollar with gold and pegging other currencies to the dollar. In 1971, when the US abruptly abandoned the gold standard, the dollar became the fiat money currency. As is well known, the US dollar is still the most widely used currency in world trade. Especially the fact that oil trade is carried out in dollars has provided the US central bank with incredible advantages.
When we analyze the national debt of countries, the US economy appears to be heading off a cliff. If any other country faced a debt burden of this magnitude, it might have to be described by rating agencies in the last letters of the alphabet. But the world reserve currency, which has been the mainstay of the US economy for years, and the manipulations that have been carried out allow for the continuation of the rampant borrowing without an inflationary spike. But it is now becoming clear that this economic data is misleading and that the recession has already begun. The US government is trying to hide the situation by publishing false economic data. As in the 2008 crisis, for example, they admitted it a year after the recession began. Today, factory orders are falling sharply, which weakens the argument for a strong economy.
The Biden administration is blamed for the mismanagement of the economy. Manipulations such as the correction of employment data prevent the public from understanding the real economic situation. On the other hand, US economists argue that the FED should not raise interest rates despite rising inflation. Instead, they point to the possibility of lowering interest rates and returning to quantitative easing. However, I believe that these policies will deepen economic problems rather than solve them, especially if the developments of recent years are not taken into account.
It should be noted that the record highs in gold prices are related to central banks buying gold instead of dollars. On the other hand, this situation reveals the fact that the world's central banks have lost their confidence in the dollar by buying gold. In addition, the depreciation of the dollar once again triggers the increase in gold prices. This could reduce the effectiveness of US financial sanctions and jeopardize the dollar's place as a reserve currency. But could other countries have noticed what is happening in the US economy? Let's analyze and see...
BRICS countries are looking for alternatives to the dollar's dominance. These countries are trying to reduce their dependence on the dollar by conducting their trade in local currencies. Putin states that the use of the dollar as a foreign policy tool is one of the biggest strategic mistakes made by the US. This situation causes BRICS countries to turn to alternatives such as gold instead of the dollar.
Turning our focus back to the US domestic economy, there are serious problems in the US housing market and economic life in general. High inflation, rising taxes and the cost of living are worsening people's economic situation. Instead of solving these problems, governments are pursuing policies that will worsen them. The FED's interest rate cuts and the return to quantitative easing are likely to further increase inflation and deepen economic problems. The housing market is suffering from low inventory and high prices. It is getting harder to build new homes and existing homeowners do not want to lose their low-interest mortgages. This is keeping house prices high in nominal terms. However, household debt continues to rise and people's economic situation is deteriorating. Unemployment rates appear to be low, but in fact many people are unable to find work or are forced into low-paying jobs out of necessity.
In addition to all this, the global economic recession and rising energy costs, especially in a climate of war, are deeply affecting Japan, the UK, Germany and other countries. Last year, the huge German economy posted a deficit for the first time in many years. It is certain that these countries will face economic difficulties due to the US policies that are fueling the war. The loss of the dollar's dominance as the US reserve currency could change the global economic balance, leading to a depreciation of the dollar and a weakening of US economic and financial power.
One way or another, the role of the US dollar as a reserve currency is in jeopardy and economic problems are deepening. Gold and other alternatives are already replacing the dollar. The BRICS countries and others are taking strategic steps against the dollar's dominance. The US's internal economic problems - high debt, inflation and low unemployment rates - threaten economic stability. In this context, economists say that individuals and businesses within the US need to adopt various strategies to protect themselves against global economic uncertainties, indicating that a massive tsunami wave is about to hit the shore.
But has this situation really been seen by US citizens or are they not aware of it? Let's talk a little bit about how the situation looks like in the US.
Many Americans pretend to be rich, but in fact spend deficit spending, just like the US government, resulting in high credit card debt, buy now, pay later, and so on. Given the US economic situation described above, things are really out of control. Recently, things have been getting worse for the US again after the economic collapse of 1930 and the economic depression is signaling. As the US enters the election year of 2025, it is at an all-time high level of borrowing. As mentioned above, during the Vietnam War, the US economy was in a serious depression and was going through a process similar to today. In 1971, President Nixon severed the link between the US dollar and gold, which meant that the FED could print money for free. Normally, in any other country, the issuance of free money would automatically lead to inflation and the cost of living. But for nearly 50 years the US has been issuing free money when it needs it, and the rest of the world has been grabbing this circulating money and using it in their international trade, especially in the oil trade. The biggest contributor to this situation was of course the US agreement with Saudi Arabia exactly 50 years ago and the introduction of the petrodollar. By forcing the OPEC countries to sell in dollars, the US fueled the world's need for dollars and put its own debts on the backs of the world's states. Thus, the FED could put as much money into circulation as it wanted, and in return, without causing inflation in the country, it would share all the debts with the world. This system has been the main guardian of the US dream for the last 50 years. Of course, this was not the only instrument the US used to spread its debt around the world. The Wall Street bond bubble, followed by the tech stock bubble, followed by the housing bubble, and so on, we poor people of the world have always been deceived, and we have always taken on the debts of the US people. When the countries of the world could not bear this burden in certain periods, they have always put the US debts on the shoulders of the people through devaluation, economic crises and political turmoil. As a result, the US dollar has hegemonized the world as a purely fiat currency with no basis in fact. To illustrate this correctly, the US government can be understood as having a credit card with unlimited spending limits and having others pay the bill, and with fiat currencies, whenever they need money, they print money and get what they need. But now that the governments of the world have woken up to this system, nobody wants to burden their poor people with the debts of the fat US people.
Since the 1980s, states that realized this and started to fight against it have been either revolutionized and ruled by US-controlled governments, or politicians who took a stand against it were assassinated. It is not widely known that Iraqi President Saddam Hussein and Libyan leader Muammar Gaddafi were among the first leaders who wanted to sell their oil without being dependent on the dollar. Today we don't even remember them. Why, because the American Petrodollar monster swallowed them up, ground them up, destroyed them and spat them out. Similarly, many assassinations in world politics are CIA-related. Even their own US presidents have been implicated. For example, President Kennedy was sacrificed because of the changes he wanted to make in the monetary system. Of course, that's not what our dear media people tell us. Because they are also important players and even defenders of this system.
So what do you do in the face of these antidemocratic fake revolutions or political murders? You are forced to either keep silent or wage war against them with your head on your shoulders. If the people are behind you, you have a chance to do something. But if you have sold-out politicians and bureaucrats or deceived people among your people, you have no chance of holding on. Examples? There are so many, most recently on 15 July 2016, when there was an assassination attempt against President Erdogan in Turkey and a coup d'état to remove the government. But the Turkish people resisted bravely. On Youtube you can still find footage of people standing in front of tanks with their bare hands and being crushed, videos of anti-aircraft bullets being fired from military helicopters at civilians, and videos of F16s attacking cities. Exactly 256 brave Turks were killed for resisting this uprising. Anyway, back to the topic at hand...
These games of the US have come to an end, people are waking up and seeing everything. They have realized that they are not going to get anywhere with political assassinations, artificial revolutions or sanctions on countries around the world. Don't they understand the backlash that all these countries will unite under by weaponizing the dollar? The whole world has realized that the mainstay of dollar hegemony is the petrodollar.
But unfortunately, we often don't learn the most important things in life until we are much further down the road. Or rather, the CIA, the guardian of this system, has prevented us from learning this. Whenever it needed to, the tyrannical US central bank was able to run its economy smoothly by printing money without the risk of the dollar devaluing, and it did so on the backs of the world's governments. But that's it now. The end of the US petrodollar empire is in sight.
What will happen if the US dollar ceases to rule? What will happen to the US economy and with it the American dream that it promised its people? These are the critical questions.
So let's go into a little bit deeper now...
BRICS Countries on the Path to De-Dollarization: A New Era in the Global Economy
BRICS countries are increasing their efforts to reduce their dependence on the US dollar in global trade and finance. This effort gained momentum with the inclusion of Saudi Arabia, Egypt, the United Arab Emirates, Iran and Ethiopia in BRICS from January 2024. This initiative, called de-dollarization, aims to develop a payment system independent of US financial control. This new system aims to reduce the geopolitical influence of the United States by facilitating international transactions.
The BRICS New Development Bank (NDB) aims to increase the capacity of member countries to lend in local currencies, with 30% of its lending in local auctions by 2024. This will reduce dependence on the dollar and mitigate risks associated with exchange rates and US monetary policy. By integrating more economies that can trade in local currencies, the enlarged BRICS, including major oil producers such as Saudi Arabia, is increasing its economic power and supporting the de-dollarization agenda.
The de-dollarization efforts of the BRICS represent a concerted effort to create a multipolar global financial system that challenges the hegemony of the US dollar. While the full impact of these measures will take time, de-dollarization marks a significant shift in global economic strategies. China has taken an important step in its dollarization strategy by selling about $50 billion of US bonds. This sale reflects China's long-term goal of diversifying its reserves and reducing its exposure to US financial instruments.
On the other hand, if we consider that the dollar bills in circulation in the world are actually bonds or promissory notes, the return of this money in circulation to the US and the demand for its equivalent would have a nuclear bomb effect on the US economy, which is already in deep trouble. Because, as we have explained above, there is no equivalent to this amount of money in circulation in the US!!! This situation is making the US economic bureaucrats sweat very seriously.
The ongoing geopolitical tensions between the US and China are triggering this strategic shift. Together with the BRICS countries, China is developing an alternative to the SWIFT payment system to facilitate international trade without being tied to the US dollar. Moreover, given the economic sanctions Russia is facing on a global scale, it can be easily understood that this will give a big boost to these developments. Moreover, the BRICS New Development Bank is expanding the capacity of member countries to lend in local currencies. Reduced demand for US bonds will lead to lower bond prices and higher interest rates. This inverse relationship occurs because when bond prices fall, yields or interest rates on those bonds rise to attract new investors. Higher interest rates increase the cost of borrowing across the economy, affecting various types of credit.
The massive debt problems in the US economy, the supply-demand imbalance in the bond market and uncertainties about the future course of interest rates are putting significant pressures on the US economic situation. Household borrowing and rising interest rates are expected to lead to economic tightening. A major risk is that the government will issue a large amount of bonds and there will not be enough investors to buy them.
The de-dollarization efforts of the BRICS are certain to potentially change the global economic balance of power. These efforts, coupled with the fact that the United States has the highest external debt in the world, will have a significant impact on the global economy. These BRICS initiatives could accelerate the transition to a multipolar global financial system and reduce dependence on the dollar. This could lead to a reshaping of global trade and finance and increase the economic power of the BRICS countries.
And what will be the response of the US economy? I don't think there is anyone who believes that they will calmly accept the situation. Also, can the US respond to the biggest uprising ever against it with its huge army? Or has this process already started? It doesn't take a clairvoyant to see that the US needs a war to get out of this cycle, and that they will stir up the world to get it.
The End of the Petro-Dollar Agreement and Its Global Implications
The 75-year petro-dollar agreement between Saudi Arabia and the United States expired on June 9, 2024. This is seen as a harbinger of major changes in the global economy. The petro-dollar system ensured that the US dollar remained the international reserve currency and led to global trade being conducted largely in dollars. The end of this system could lead to the end of the dollar's global economic dominance and a reshaping of world trade.
The petro-dollar system began with the US agreement with Saudi Arabia in the 1970s. In exchange for military protection and economic support to Saudi Arabia, the US ensured that oil sales would only be in dollars. This system helped strengthen the dollar as the global reserve currency and helped the US maintain its economic and political supremacy.
This system gave the US two important advantages: economic stability and financial advantages. The dollar's status as a reserve currency allowed international trade and investment to be conducted in dollars. It also reduced US borrowing costs, making its financial markets liquid and stable.
There are several reasons for the end of the petro-dollar deal. First, Saudi Arabia and other developing countries want to reduce dependence on the dollar and trade in their own currencies. This is a goal that is in line with the efforts of the BRICS countries to create an alternative reserve currency to the dollar.
Second, US global policies and economic sanctions have reduced other countries' reliance on the dollar. China and Russia, in particular, have taken major steps to reduce their dependence on the US dollar and have started to hold gold and other precious metals in their reserves instead of dollars.
If the agreement signed 50 years ago between the US and Saudi Arabia, which allows oil to be bought only in dollars, is not renewed and oil is sold in euros, yuan, gold or even Bitcoin, this could usher in a new era not only for the US and the dollar's dominance but also for the world financial order. Moreover, it would reduce the dollar's role in international trade, which would increase volatility in currency markets. Let's not forget that the depreciation of the dollar would mean higher import costs for the US economy, which would lead to higher inflation, which in the current circumstances would start an unstoppable cycle of collapse.
High inflation leads to higher interest rates and higher borrowing costs. This means higher interest rates on mortgages, car loans, student loans and credit cards. It can also increase pressure on the banking system, leading to more bank failures.
A depreciating dollar reduces US international purchasing power and competitiveness. Travel abroad and the prices of imported goods increase, raising the cost of living for American consumers. In addition, retirement accounts and investment portfolios are negatively affected.
The end of the petro-dollar system will reduce US influence in the Middle East and weaken US global economic dominance, which in turn will reshape the global economic order, reduce the role of the dollar in international trade, and ultimately remove the golden goose of the US economy. So how will the US economy, already under so much pressure, respond? How will the collapse be stopped?
It seems that the environment in which excessive deferred debts across the US suddenly become more difficult to repay could make the US citizenry look back to the Depression of the 1930s.
The Trend Away from the US Dollar as the Global Reserve Currency,
Alternative Currencies and the Value of the Dollar
Once the countries of the world started to question why they were using the US dollar in global trade and started to understand the realities, they started to look for alternatives to the US dollar. These countries are experimenting with trading using their own currencies and digital currencies. China's launch of the digital yuan can be seen as part of these efforts. With its digital yuan pilot program in Hong Kong, China aims to bypass the dollar in global trade.
In addition, all countries are questioning why they do not trade in their local currencies. With global distrust of the US, the prospect of throwing off the yoke of the dollar is a welcome one. Perhaps they feel the slap in the face of imperialism that they have been waiting for for years.
In conclusion, the loss of the US dollar as the global reserve currency will lead to major changes in the international financial system. The shift to alternative currencies by countries like China and Russia could devalue the dollar and deepen the US economic problems, which seems inevitable.
BRICS Countries' Efforts to Reduce the Impact of the Dollar
In response to the US weaponizing the dollar's dominance in the global financial system, the BRICS countries are seeking an alternative currency to replace the dollar. These countries are coming together to reduce dependence on the dollar and increase their own economic power. BRICS aims to create alternative trade methods that are not dependent on the dollar and a new reserve currency.
BRICS countries aim to create an alternative currency that is not dependent on the dollar to trade among themselves. In this context, the idea of creating a new reserve currency has come to the fore. This currency could be used in international trade by replacing the dollar and facilitate trade among BRICS countries.
BRICS countries are trying to become independent from the dollar by using their own currencies or valuable commodities such as gold and oil in their trade. This strategy was developed to reduce the effects of US economic sanctions and increase their financial independence.
BRICS countries organize various meetings and summits to ensure greater cooperation and coordination in the international arena. At these summits, common economic policies are developed and strategies to reduce the global influence of the US dollar are discussed.
Central banks can contribute to this transformation by changing their reserve allocation and using alternative currencies. The People's Bank of China is taking several steps to increase the international use of the yuan. The adoption of the yuan as an international reserve currency could weaken the role of the dollar in the global financial system and increase the financial independence of the BRICS countries. The Central Bank of Russia has also diversified part of its reserves into other currencies such as gold and the euro. This strategy is part of Russia's efforts to reduce the influence of the dollar and increase financial stability.
BRICS Digital Currency Announcement
Russia has announced the development of a digital currency for the BRICS countries. While there has been speculation that this new currency will be backed by physical assets such as gold and other commodities, the Kremlin has stated that the currency will be based on blockchain technology and is almost complete.
The BRICS countries are an economic bloc that collectively represents more than 3 billion people, and this size could have significant implications for global trade if a new common currency is adopted.
US Strategic Moves and the Digital Dollar
The US Federal Reserve (FED) is working on a digital dollar, but has not yet taken a definitive step. FED Chairman Jerome Powell has stated that the digital dollar could help the US maintain its role in the international financial system. However, China's digital yuan move could give it a huge competitive advantage over the US.
There is no doubt that the developments led by the BRICS countries are pushing countries to conduct world trade in their own currencies or alternative currencies in order to reduce dependence on the US dollar. This strategy is an important step towards building a multipolar economic order that challenges US global financial dominance.
At this point, let's take a look at the economic indicators and try to understand what these developments might affect;
BRICS is a geopolitical and economic bloc of 10 countries representing 45% of the world's population and 37% of world GDP. Its mission is to create a multipolar world order, both politically and economically, against the unjustified pressure of the US, EU, Japan and other Western powers. In this context, the BRICS countries are dissatisfied with the use of the dollar as a weapon and want to oppose this situation.
The US has been a dominant force in the world economy for many years, and this has been supported by its policies of money printing and borrowing. The US debt of more than $34 trillion has remained sustainable thanks to the willingness of the country's creditors around the world to buy it. However, if the BRICS countries decide to work to reduce dollarization, it is possible that these dollars will flow back to the US, potentially triggering a major economic crisis.
BRICS seeks to establish a rival financial system that mirrors the existing Western system. The BRICS New Development Bank is the equivalent of the West's International Monetary Fund (IMF). In addition, alternatives to the SWIFT payment system are being developed, such as the BRICS Pay. The BRICS global reserve currency is also part of this system and is planned to be backed by commodities such as gold and oil. This currency could potentially be blockchain-based, making it a digital central bank currency.
The BRICS countries, especially China, Russia and India, are rapidly increasing their gold reserves. This signals that the new BRICS currency may be backed by gold. In the last 18 months, China has increased its gold reserves, Russia has pegged the ruble to gold and India has increased its gold reserves by 40%. These developments indicate that the BRICS countries fear that the US dollar will fall or be used as a weapon against them.
If the 10 BRICS countries completely de-dollarize their economies, a money supply worth about $8.14 trillion could return to the US, with serious consequences for the US economy, including inflation, debt crisis and potential hyperinflation. Such an event could bring serious political and social instability to the US.
Bitcoin stands out as an interesting variable in this multipolar monetary order. Bitcoin cannot be controlled by any government or group and offers transparency, reliability and independence. Bitcoin is increasingly accepted worldwide as an alternative to fiat currencies and holds promise for the world that awakens to the reality of this monetary savior.
What are the obstacles to these developments?
BRICS countries are discussing the idea of creating a common currency, but there are significant obstacles to this. First of all, the economic and political differences between the countries make it difficult to create a unit like the Euro, and the expansion of BRICS, along with the increase in the number of members, complicates the ability to act collectively. The technical difficulties of creating a common currency and the sovereignty concerns of countries are also major obstacles.
Alternatively, a basket currency similar to the IMF's SDR or blockchain-based payment systems have been proposed. However, both options have their own challenges; for example, with a basket currency, economic imbalances between countries are a political constraint. Blockchain-based systems, on the other hand, are not yet fully developed and there are uncertainties in their implementation.
Criticism of the BRICS in the international system may affect the international acceptance of a common currency or payment system. The international trust-based acceptance of such a unit or system is based on political and economic power.
The BRICS currency will most likely be digital and blockchain-based. It is still unclear whether it will be backed by gold. It aims to be a broadly inclusive currency that can be used not only for intergovernmental transactions but also for trade between individuals. However, the adoption and implementation of this currency may involve challenges due to political and economic differences between member countries. India, in particular, may have to abandon its goal of strengthening its own currency.
On the other hand, the official launch of the digital yuan is seen as China's strategy to counter US sanctions. As it is known, the launch took place in Hong Kong, from where it is planned to spread around the world.
Immediately after this development, US officials expressed their reactions against China's move. US Treasury Secretary Janet Yellen and Secretary of State Antony Blinken stated that China would face sanctions if it did not stop its support for Russia. The US has indicated that it may block dollar transactions by Chinese banks, targeting their financial institutions. This creates the need for China to establish an alternative financial system to neutralize US sanctions.
Under a pilot program launched in Hong Kong, digital yuan wallets can be opened at major Chinese banks and used to make direct payments to merchants in mainland China. Major Chinese banks such as Bank of China and ICBC Bank have already integrated this program. This system provides a hedge against US sanctions by making transactions more confidential and difficult to trace.
As the largest trading partner of more than 100 countries worldwide, China is a major economic power. The adoption of the digital yuan could increase China's economic clout and change the dynamics of global trade. As the use of the digital yuan increases, central banks could hold fewer dollars in their reserves, which could further devalue the dollar.
Turkey's Accession to BRICS
Turkey's interest in multipolar world systems such as BRICS+ is growing. The importance of BRICS+ was emphasized during Foreign Minister Hakan Fidan's visit to Moscow. The term BRICS+ refers to an expanded structure formed by the possible addition of new members to BRICS. This structure emerged as a reaction against the hegemony of international financial institutions and creditors.
BRICS emerged in 2006 with the contacts of Brazil, Russia, India, India and China at the UN sessions and was officially established in 2009. It was renamed BRICS in 2011 with the accession of South Africa. This grouping emerged as an opposition to the injustices of the global economic and political system and aims to be an alternative to Western-centered international institutions.
BRICS countries complain of under-representation in institutions such as the IMF and the World Bank and of injustices in the international financial system. This has become particularly pronounced in the wake of global economic crises and trade imbalances.
The BRICS+ concept refers to an expanded structure with countries such as Saudi Arabia, Egypt, the UAE, Ethiopia and Iran joining BRICS. Countries like Turkey, located at the intersection of global trade routes, should not be considered in isolation and may seek a more effective representation in the international system. Turkey's participation in BRICS+ could strengthen its foreign policy and economically enable it to take a stronger stance against international financial manipulations.
As a NATO member that has been waiting for decades for European Union (EU) membership, Turkey is seriously considering joining the BRICS grouping. Turkish Foreign Minister Hakan Fidan expressed his desire to join BRICS during his visit to China and the issue was discussed at a meeting of BRICS foreign ministers on June 10-11. Given the opposition of some European countries to Turkey's accession to the EU, Turkey sees joining BRICS as an alternative integration platform.
Turkey's participation in BRICS offers many economic and political advantages. BRICS offers a viable alternative for member countries and this platform emphasizes Turkey's great potential and scope. It is well known that Turkey is a member of NATO, is in a customs union with the EU and applied to join the European Economic Community 40 years ago. However, negotiations on Turkey's EU membership have long been stalled due to contentious issues such as human rights and foreign policy.
The United States and Western allies have expressed concern about Turkey's relations with Russia. In this context, Dmitry Peskov, the Russian President's public relations chief, stated that Turkey's interest in BRICS is welcome. However, the organization is unlikely to accept all 30 countries and therefore Turkey's membership is not guaranteed.
BRICS is a platform open to countries seeking a different political and economic system. Membership is based on the principles of sovereignty and equality of countries. Turkey's accession to BRICS will strengthen its economic ties with the Commonwealth of Independent States (CIS) countries in Central Asia and connect it with China, Iran and India through projects such as the Belt and Road Initiative and the North-South Transport Corridor.
BRICS offers a huge market and Turkish products are welcomed in this market. Turkey's accession to BRICS will boost the country's economic potential and strengthen its strategic position in the region. As a country with NATO's second largest army, Turkey is looking for alternatives due to the delay in joining the EU.
The expansion of BRICS offers new opportunities for countries like Turkey. Turkey's accession to the BRICS will not completely cut its relations with the US and the EU, but rather diversify its economic and trade relations. Turkey's geographical location at the crossroads of Europe and Asia gives it a strategic advantage.
In conclusion, Turkey's accession to BRICS could be a step forward to help the country realize its economic and political goals. BRICS membership would increase Turkey's regional and global influence and open up new trade and cooperation opportunities. While this does not mean that Turkey has abandoned its pursuit of EU membership, it shows that BRICS as an alternative integration platform is an attractive option.
Now let's take a look at the Turkish economy, which will add strength to BRICS.
The last two decades of the Turkish economy
In the mid to late 2000s, Turkey stood out as one of the fastest growing economies in the world. During this period, important steps were taken to fight inflation and new legislation gave the central bank more authority to ensure price stability. A new currency, the Turkish lira, replaced the old currency, which had lost value due to hyperinflation. These changes played an important role in bringing inflation under control.
Turkey's economic growth was supported by massive investment in industry, education and international trade. The country was geographically located as a bridge between the consumer markets and advanced industries of Europe and the natural resource wealth of the Middle East and Russia. This strategic location made Turkey attractive to both local and international investors.
However, Turkey's rapid economic growth did not last long. In 2013, after economic output peaked, the country entered a period of slow decline. During this period, the value of the Turkish lira began to fall steadily. The central bank was reluctant to raise interest rates for fear of hampering growth. The depreciating currency had a negative impact on Turkey's economic growth and inflation started to rise again. It is indeed remarkable that the downturn in the Turkish economy and the economic difficulties coincided with the political problems and the clash with US policies. Whenever Turkey tries to pursue national and independent policies, economic problems immediately follow!
Inflation and the massive depreciation of the Turkish lira have become the country's biggest major problem for the last five years. In 2005, the new currency replaced the old Turkish lira, which had depreciated due to hyperinflation. This process led to the fact that economists and participants of the economy began to consider this situation as a systemic problem.
The attempted coup in 2016 exacerbated political instability in Turkey. This event made foreign investors concerned about developments in Turkey and hesitant to invest. A year later, in a referendum motivated by the coup attempt, the country amended its constitution to give more power to the head of state, which indirectly meant that the new president could have much more control over issues such as interest rates.
These developments accelerated the depreciation of the Turkish lira and caused inflation rates to rise. The government put pressure on the central bank to keep interest rates low, which caused inflation to rise as high as 80%. This led to a major crisis, especially because of its negative effects on the working class.
On the other hand, it is also a fact that the Turkish economy is seriously manipulated from outside. In the 20th and 21st centuries, it is no secret that the economy is used as a tool of war between countries. Each country applies economic manipulations to countries that it sees as rivals, that it thinks are acting against its interests or that it is trying to exert political pressure on. Countries that realize this are known to take a front against these manipulations and try to protect themselves. Just like the current struggle of the BRICS to eliminate the dollar hegemony, or to put it more accurately, the whole world is trying to hunt the vampire feeding on its veins. Let's get back to our topic.
Based on the last 80 years, we know that countries have used various strategies to manipulate their competitors economically. These strategies can be through economic pressure, sanctions, trade barriers, currency manipulation, forcing high inflation, devaluation of the country's currency or other economic instruments.
The following examples illustrate that Turkey has been subjected to such economic manipulation at various times in the last 80 years. The lessons Turkey has learned from these processes play an important role in shaping its economic policies today.
- Military coups in Turkey: It is known that after the 1950s there was a NATO wing structured within the state (which is similar in all countries!). The parties of this wing acted in favor of NATO and indeed American interests rather than national interests. Interestingly, whenever national programs have been implemented in Turkish political and economic life, there have been military or postmodern coups, memorandums and coup attempts. May 27, 1960, March 12, 1971, September 12, 1980, February 28, 1997, April 27, 2007, July 15, 2016 are some examples. The winners of these events have always been the United States and the losers have always been the Turkish people.
- The 1970s Oil Crisis and Foreign Debt: The oil crisis of the 1970s severely affected oil import-dependent countries like Turkey. Rising oil prices increased Turkey's foreign debts and caused an economic crisis. In this period, the increase in foreign debts increased economic dependency and became a situation that could affect Turkey's foreign policies.
- IMF Programs: After the 1980 coup d'état, Turkey was forced by known states to start implementing IMF (International Monetary Fund) economic programs. Although these programs seemed to be introduced to ensure economic stability, they included tight monetary policies and structural reforms. In the short term, these reforms led to economic contraction and social unrest. These IMF-recommended policies were seen in some quarters as economic manipulation. The country's critical industries and institutions were privatized.
- 1994 Economic Crisis: In 1994, Turkey experienced a major economic crisis. High inflation, current account deficit and foreign debts caused the Turkish Lira to depreciate. Speculative attacks and rapid capital outflows by foreign investors further deepened the crisis. This crisis is an important example of external influences creating economic fragility in Turkey. Perhaps we say this because the country cannot afford to identify similar speculation in the past.
- 2001 Economic Crisis: In 2001, Turkey suffered a major economic shock with a crisis in the banking sector. Weaknesses in the banking sector, financial manipulations and foreign capital outflows triggered the crisis. Although the loans from the IMF and the reforms implemented seemed to ensure economic stability, it was only in this process that debates on economic independence came to the fore. The country was forced to submit economically to the IMF and therefore politically to the US.
- 2018 Currency Crisis: In 2018, Turkey entered a currency crisis following diplomatic tensions with the United States. US sanctions against Turkey and speculative foreign exchange transactions led to a rapid depreciation of the Turkish Lira. This crisis was seen as an example of economic manipulation.
- The pastor Brunson Case: "I will destroy your economy!" echoed in the media and resulted in the depreciation of the Turkish lira;
July 25, 2018: Donald Trump announced on Twitter that he will impose large sanctions on Turkey if Pastor Brunson is not released: "The United States will impose large sanctions on Turkey for their long time detainment of Pastor Andrew Brunson, a great Christian, family man and wonderful human being. He is suffering greatly. This innocent man of faith should be released immediately!".
August 10, 2018: Trump announced that he will double tariffs on steel and aluminum imports from Turkey, putting Turkey in a difficult economic situation: "I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar! Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!"
https://www.theguardian.com/us-news/2018/jul/26/andrew-brunson-trump-turkey-threaten-sanctions?CMP=share_btn_url
https://www.reuters.com/article/idUSKBN1KG24M/
https://www.bbc.com/news/world-us-canada-44974722
- Joe Biden's election promises: Joe Biden's comments about the government in Turkey in an interview with the editorial board of the New York Times in 2019 caused widespread repercussions and controversy, especially in Turkey. He openly said that he would do everything he could to overthrow the government and this was broadcast everywhere. Biden characterized Erdogan as an authoritarian leader and stated that the US should take a tougher stance against Erdogan and would work to overthrow Erdogan "democratically and peacefully!!!" by supporting opposition parties in Turkey. And why? Because Turkey's national policies were again at odds with US interests, and the US wanted to secure the election by pointing the finger at various lobbies in domestic politics. And guess what happened as a result? The Turkish economy was again attacked by "unknown" people, the Turkish currency depreciated, real estate and commodity prices "strangely!" soared, and there was a terrible inflation.
No matter how challenging Turkey's economic situation is, it is important to remember that the country has a very promising potential. Turkey has a large and skilled labor force, rich natural resources and a strategic location. These advantages suggest that Turkey can play an important role in the global economy.
However, some realistic solutions are needed to ensure economic stability. First, the central bank needs to regain its independence and raise interest rates to control inflation. Moreover, to solve Turkey's external borrowing problems, policies should be developed to reduce external debt rather than restricting the use of foreign exchange.
Political stability is also critical for Turkey to realize its economic potential. A stable political environment is necessary to win the confidence of foreign investors and encourage them to invest in the country. This will be a vital step for Turkey to sustain its economic growth and strengthen its role in the global economy.
No one, especially economists, can predict the future, but the OECD predicts that Turkey will be the world's fifth largest economy in purchasing power parity terms by 2060. This would also make it the largest economy in Europe and the Middle East. With the recent establishment of the Turan union, this potential will be significantly strengthened.
As can be seen, Turkey has faced major economic challenges over the last two decades. Problems such as inflation, currency depreciation and interest rate policies have negatively affected the country's economic stability. However, Turkey's potential and strategic advantages suggest that the country could become a major economic power in the future.
Achieving this goal requires a reorientation of economic policies and political stability. Turkey's strong fundamentals and promising economic potential, combined with the right policies and a stable political environment, can strengthen the country's role in the global economy and ensure sustainable growth.
Turkey has painfully learned that its "strategic partner", the United States, has never been its friend and that this "strategic partnership" is meant only for US interests. For this reason, it is a fact that instead of a unipolar perspective in world politics, Turkey is now turning towards new relations in which all parties will win in accordance with the win-win policy.
Geographically, Turkey has always been a bridge between the consumer markets and advanced industries of Europe and the natural resource riches of the Middle East and Russia. In recent years, it has become an energy hub with its investments in oil and gas pipelines and projects with friendly countries. On the one hand, it maintains its relations with the West as a member of NATO, but at the same time it is forging new partnerships with Russia, China and countries around the world. In this sense, BRICS offers very attractive advantages for Turkey. In particular, Turkey's position as a natural leader in the context of Islamic states, its position as the host of the Turkic states, its prestige and weight on African countries and its position to dominate a serious economy are similar advantages for BRICS. Turkey's participation in BRICS could give a serious impetus to the win-win policy mentioned above.
Turkey's Visit to China: What the Media Missed and Geopolitical Realities
We will be looking at the between the lines and the unspoken parts that are often ignored in the mainstream media, but are in fact much more important. What are the general results, what are the points that attract our attention? Let's start by answering these questions. The visit of Hakan Fidan, the Foreign Minister of the Republic of Turkey, to China and the historic speech he delivered there did not receive enough media coverage. The media only put in front of us the parts they could manipulate.
How has China been on Turkey's agenda so far? Turkey started to follow the world agenda more due to issues such as the Ukraine war, Israel's policies towards Palestine, the Azerbaijan-Armenia war and the Libya issue. However, China was not on the agenda in terms of political relations. However, trade relations between Turkey and China are at a very important level. Bilateral trade volume reached 48 billion dollars in 2023. This figure is much higher than our trade relations with some neighboring countries.
The Uyghur issue is a sensitive topic for Turkey and is brought up from time to time. However, Foreign Minister Hakan Fidan's speech made it clear who is right between the US and China in a bipolar world. Fidan made it clear that China is right on certain issues and that the US is wrong on these issues. This is an extraordinary speech and needs to be analyzed. Its geopolitical dimension is quite strong.
The Belt and Road Initiative and the Caspian trans-Caspian East-West Central Corridor Initiative are of great importance for Turkey. Fidan emphasized that these projects should be integrated and concrete steps should be taken. These statements show that Turkey fully supports China's territorial integrity and political sovereignty.
Fidan's statements on BRICS reveal Turkey's intention to strengthen its relations with this organization. These statements were widely covered by international agencies. However, this news has not been sufficiently covered in Turkey. How will Turkey's BRICS membership affect its relations with the West? The answer to this question depends on how geopolitical balances will change.
The US exploitation of the Uyghur issue against China makes Turkey's stance on this issue even more important. Fidan stated that Turkey fully supports armed terrorist movements against China. This means that Turkey criticizes the US policies on this issue.
The future shape of Turkey's relations with China depends on many factors. The Foreign Minister's statements during his visit to China are likely to strengthen Turkey's geopolitical position. BRICS, the Belt and Road Initiative and the Middle Corridor projects will solidify Turkey's position in the international arena.
In conclusion, Foreign Minister Hakan Fidan's visit to China and the speeches he delivered there clearly demonstrate Turkey's strategic stance in international relations. The outcomes of this visit and the geopolitical balances should be closely monitored.
