THE GEOECONOMIC WAR
Beneath the headlines of tanks and diplomacy lies a silent battle redefining global finance. From the weaponization of the US Dollar to the rise of BRICS+, understand the forces impacting your wealth.
The Dollar as a Weapon
The US Dollar is not just a currency; it is a global infrastructure. Since Bretton Woods, it has dominated reserves and trade, giving the US unparalleled leverage.
Global Reserve Dominance
Over 60% of central bank reserves are held in USD, making it the bedrock of the global economy.
Source: BIS, IMF
The SWIFT Network
Think of SWIFT as a global messaging service for money. It acts as the “toll booth” for international trade. Expelling a nation from SWIFT effectively disconnects them from the modern financial grid.
Forex Volume
Nearly all international currency exchanges involve the “greenback”, cementing its hegemony.
The 2022 Financial Shock
In 2022, the West pressed the “nuclear button” of finance: freezing sovereign assets. This shattered the assumption that reserves were safe, conditional only on ownership, not politics.
Frozen Assets
Reserves Confiscated
Russian reserves held in Western banks were immobilized instantly.
Russian Economic Contraction (2022)
Despite the massive sanctions package designed for “shock and awe,” the Russian economy showed resilience, contracting less than expected due to trade reorientation.
The Boomerang Effect & Energy
Sanctions disrupted the “circulatory system” of the economy: Energy. Restricting Russian gas spiked prices globally, fueling inflation and risking stagflation in the West.
The Energy Reorientation
“Sanctions create inefficiencies, they do not stop trade. Energy flows find new paths.”
Stagflation Risk
The war caused a supply shock. When supply drops, prices rise (Inflation), but growth stalls (Stagnation). This forces central banks into a difficult corner.
Dedollarization & BRICS+
Triggered by the weaponization of reserves, nations are actively seeking alternatives. The era of a “neutral” dollar is ending, giving rise to a fragmented financial order.
Russia-China Trade Settlement
A massive shift: over 95% of bilateral trade now bypasses the Dollar, utilizing the Ruble and Yuan instead.
BRICS+ Expansion
The bloc has expanded to include major oil exporters, challenging the G7’s economic dominance.
Original Members
- Brazil
- Russia
- India
- China
- South Africa
New Power Players
- Saudi Arabia
- UAE
- Iran
- Egypt
- Ethiopia
The inclusion of major energy exporters signals a potential shift away from the petrodollar.
Navigate the Chaos
The old rules of finance are changing. In a fragmented world, knowledge is your only shield. Diversify your assets, understand the risks, and prepare for a multipolar economy.