Summary
Transcript
By now, you must have heard that Saudi Arabia is leading the US dollar and the petrodollar agreement. I mean, I did a whole video on it, but what you probably don’t know is what they’ve just signed up to use right now. I know it’s not the Chinese Yuan. It’s actually something much more dystopian and scary. It’s something I’ve been keeping you up on over the last year. I’m talking about CBDCs and specifically I’m talking about project from the BIS called project in bridge, but there’s been some major changes and there’s been some advancements since I last covered it that you need to know right now.
So in this video, I’m going to break down what project in bridge actually is. I’m going to talk about the recent advancements that have been made, why Saudi Arabia is choosing this over the dollar. And most importantly, what this means to you and I right now in the longer term. Now, but in this video, you’re going to understand exactly what project in bridges and more importantly, you’re going to be able to form your own opinions on whether you think it’s good or bad. And more importantly, what your plans are for dealing with this.
Now, if you’re new to the channel, my name is Mark Moss. I’ve been making these educational financial videos for over five years now. I’ve been an investor for over 20 years. I have lots of experience doing that. I’ve been writing an investment newsletter for over seven years that consistently beats the markets. I’m a partner in a Bitcoin focused hedge fund and I speak at many of the largest financial conferences in the world. And I made this channel to deliver that exact same information directly to you. So let’s go. All right. So we’re jumping right into this and we’re talking about Saudi Arabia did what? Now, lots of videos, lots of blogs, websites, et cetera, talking about Saudi Arabia ditching the petrodollar agreements of not renewing the petrodollar agreement, ending the petrodollar agreement, whatever you want to call it.
Then there’s a whole lot of videos and websites and blogs talking about that. That’s fake news. And they didn’t actually do that. Well, there’s actually some truth in both thing is there’s nuance. First, I want to break down a little bit of the nuance for you. But more importantly, what I want to talk about is what they’re really going to do and how it’s going to impact us. But let’s just break some of this down for you, some of this nuance. So you see headlines like this. No, Saudi Arabia is not ending their petrodollar deal.
They’re not. So people contradicting that. But then we see plenty of other ones saying that they are. So what’s the truth? Well, the truth is, is that there was an actual agreement. In 1974, Saudi Arabia and the U.S. agreed on mutual cooperation. And basically what happened is it was signed on June 8th, 1974. And the USA and Saudi Arabia was about exclusively price, but was not about exclusively pricing oil and dollars. So that’s where the miscommunication or the nuance is. That’s not exactly what this was. It was a bigger agreement that was formed.
But basically, it was about enabling Saudi Arabia to use its money, its dollars from oil and put them into the U.S. economy. So it was a bigger agreement that allowed for this cooperation where the U.S. would provide weapons and assistance and technology. And then they would allow Saudi Arabia to put the dollars back into the U.S. financial system. That’s what didn’t get renewed. So it didn’t get renewed. It’s just not exactly what people think. So there’s kind of truth to both of those. I just kind of want to dispel that for you a little bit.
Now, what people are saying is that’s fake news that didn’t really happen. And the dollar is not going down, which again, if you watched my previous video where I talked about this, I have said the same thing. This doesn’t mean it’s inevitable. It doesn’t mean the dollar is going to crash tomorrow and it’s going to be over. But what it does mean is that it’s going to continue the trend that it’s on. And so what we can see right here is we can see the U.S. dollar in blue here as a percentage of global trade.
And these are other currencies, the Chinese RIMBI, Japanese yen, British pound, euro, the other big currencies in the world. Now, what we can see, I put this arrow on the screen, is the trend line is going down. OK, so we were at almost 80 percent here back in 2000. And now we’re down below 60 percent here now. OK, so yeah, we have it plunged. We’re not going off of a cliff, but the trend is going down. And what happens is it’s sort of the gradually and suddenly this is the trend that we’re on.
That’s why I show you charts all the time. So you can see the trend, the direction that we’re going. And this starts to accelerate like this when certain catalysts are forming like I’m about to break down for you. I do want to show you one quick note here. This is the Chinese Yuan, which hadn’t been used. And now all of a sudden you can see that starting to gain traction. OK, so these things don’t happen in an instant. They happen over time. As I always say, it’s a process, not an event. Now, just to kind of show you some other charts, you can get an idea.
This is also the U.S. dollar and other currencies. U.S. dollar, the blue is the euro and then we have the CNY. And what we can see is that the U.S. dollar is continuing to go down. This is from 2004 to 2022. And we can see it’s dropped about 19 percent. At the same time, the euro has gone up just a little bit. It’s sort of on this trend line, but the CNY China is coming up. OK, so it’s the trend, it’s the direction. But again, there’s certain things that happen around technology that speed them up.
And that’s what I want to break down to you. Just one more chart so you can kind of see this. I like to show you the charts and graphs. You can see the size and the speed of these moves. So here we are. This is in 2014, so it’s much more recent. Here we are at 66 percent. And you can see today here, you know, here we are about 60 percent. So that’s sort of the direction. That’s what’s going on. But let’s take a look at what’s bigger, bigger story. And that is that Saudi Arabia, which had this agreement with the United States for mutual cooperation, like I said, exchange for protection, weapons, technology, and they had recycled those dollars back in the U.S.
Now, Saudi made a deal with the B.I.S. And not just the B.I.S., the B.I.S. and China. OK, now you might be asking yourself, what the heck is the B.I.S.? Which is a pretty good question to ask because most people don’t really know about the Bank of International Settlements. All right, I’m going to explain this. I’ve broken it down a couple of times. If you’re a regular viewer of the channel, then you’re probably aware of the B.I.S. And if you’re not a regular viewer, then you should be. Click that subscribe button right now if you don’t mind.
OK, so we want to talk about joining the B.I.S. So right here we have this. You can see the news headlines. Saudi Arabia joins the B.I.S. and a China led China led central bank digital currency project. OK, so it was on the U.S. and the U.S. led dollar network. The dollar is a lot of things, but really, the dollar is the currency. Sure, like a paper dollar, the dollar that we send digitally. But also it’s a payment network so you can send a dollar anywhere in the world. It’s the largest payment network in the world. And so they’ve been on the U.S.
dollar payment network. And now they’re joining China and the China led central bank digital currency project. It’s a pretty big deal. We’re going to break this down for you. But I want to show you a couple excerpts here. So here we see this is June 5th just came out. Saudi Arabia has joined the China dominated central bank digital currency announced by the B.I.S. Bank of International Settlements. And you’ll see Saudi central bank as a full participant. The reason why that’s important full participant is because this B.I.S. China led central bank digital currency project has been under development for a long time.
It’s been under a testing phase. What we call an MVP, minimum viable product. Again, I’ve talked about this for over a year, but now they’re past the testing phase and they become a full participant of this project in bridge. That’s the key project in bridge. Again, you might have heard me talking about that before. But just for a real quick, who is the B.I.S.? You might have seen this chart before from me using it. People love it when I pull this chart out. So what am I showing here? So what we have at the very top of the heap right here, this is like an org chart for your company, is the B.I.S.
This is the Bank of International Settlements. And so in the world of policymakers, decision makers, like who are they? We have the B.I.S. sitting at the top of that stack. Below the B.I.S. is the central banks. So all the central banks are under the B.I.S. It’s sort of like the central bank for central banks. We sort of have the IMF in here as well. Then below that, we have the policymakers. And really all of these are policymakers. It’s the World Economic Forum, the WEF, the CFR, the Club of Rome, Chatham, Althrockafellers. So all of these people are the ones that make the policies.
And then we have the United Nations, the UN, the IMF, IPCC, World Bank, World Health Organization, the WHO, etc. They distribute these policies down, down to who? Down to your government, down to your country. That would be the United States, Europe, etc. These are the policy enforcers, okay? Then it goes down to the policy propagandists, which are, of course, mainstream media, fact checkers, things like that. And eventually, it gets to you and I down here at the bottom, the policy subjects, the public. And so this is the way the world works with the B.I.S.
sitting up at the top of that. It’s important to understand that because now we’re talking about a new B.I.S. China technology that Saudi Arabia just went over to join. And it’s not just Saudi Arabia joining it. I’m going to break down everybody else who’s joined it. And there’s a couple that are going to really surprise you. Okay. Now, real quickly, we can see that it’s not just countries joining it, but we have 15 news cases and 22 heavyweight participants, including Goldman Sachs, one of the largest investment banks in the world, a U.S.
bank, HSBC, right? China’s biggest state-owned banks. They’re all part of this project. So this is not some small little backwater deal. This is a really big deal. As a matter of fact, here’s a list of most of these companies, our countries and banks. Here’s as of June of 2024. So this is a current list, observing members. There’s more that I want to read out here, but I’ll read out a couple notable ones. The Asian Infrastructure Investment Bank, Indonesian Bank, Bank of France, Bank of Israel, Bank of Italy, Bank of Korea. I mean, they got some big players on here.
Central Bank of Chile, Bank of Egypt, Central Bank of Jordan. And again, some big countries that are sort of in the news right now. Central Bank of Norway, Central Bank of the Republic of Turkey, the ECB, the European Central Bank, the IMF, the International Monetary Fund. And here in purple, I put the New York Innovation Center, the New York, which is the hub of the American banking system. The Federal Reserve Bank of New York is on there. Reserve Bank of Australia, South Africa, Reserve Bank and the World Bank. Not some little small backwater deal.
This is what history books are written about. This is world changing, sort of like in 1944, when the Bretton Woods Agreement was put forth. We’re living through this right now. That’s why it’s important that you understand this. All right. Now I want to just talk about this real quickly. This is what I call a leapfrogging event. And that’s what technology does. So basically what happens is we have these technologies that come out and it leapfrog. So for example, in the United States, we had a wired telephone system. It spread out throughout the country, had been out there for about a hundred years.
When the internet rolled out in the United States, it rolled out very quickly because it went over the phone line. If you’re old enough to remember those old phone modems with that weird sound that happened. So basically we had this wired phone system and so we could roll out the internet very quickly. But in countries like Africa, for example, they didn’t have wired telephone system. So they didn’t get the internet as fast as the United States did. But what happened is Africa never did. They never had a wired system. So they never had wired internet either.
They leapfrog past that and went straight to wireless. Why is this an important point? It’s an important point because as I said, the US dollar is the largest payment network in the world. And so many people who think this is a nonsense, this is a big nothing burger, are going to say there’s no one that can replace the dollar network, the Swift system, because the US dollar has the deepest bond market. It has the correspondent banking network, and it has the Swift system, right? So those three things, you can’t just go replace it.
I mean, you could, but it’s going to take a long time and nobody has that right now. That’s what they’re going to tell you. But the thing is, that’s sort of like saying Africa could never have the internet because they didn’t have wired telephones. But Africa found out they didn’t need wired telephones to have the internet. And that’s exactly what this leapfrog moment is. So turns out the world doesn’t need to have the Swift payment system and the correspondent banks. They can leapfrog past and use new technology, which is project Enbridge or the CBD system that we’re talking about.
All right, let’s talk about Enbridge specifically so you can understand what’s going on. This looks like it’s the new financial system. You should know about it sooner than later. Let’s break this down. Okay, so this is directly from the BIS website. You can go there and read about it on your own. Project Enbridge is connecting economies through CBDC, Central Bank Digital Currencies. I’m not going to go super deep into this. I’ve talked about it extensively, a Central Bank Digital Currency. It’s basically digital money, but more than that, most of our money is digital anyway.
More than that, it’s programmable money. So that means that they can program into it what you can and can’t do with it. What you can and can’t buy, what you can and can’t spend. For example, you’ve gone over your allotment of carbon in this cycle so you can’t buy meat or buy gas right now. Or these things aren’t healthy for you so you can’t buy them anymore. If you don’t spend your money by Friday, it comes back to us. So there’s all types of things that could be put in very Orwellian. A lot of control that can be baked in.
It gets worse than that, but I’m not going to go deep into that. But this is exactly what’s going into place right now. For a little bit more context, here’s directly from the BIS website. And we can see that what they’re saying is the payment system underpinning the cross-border, so sending money from country to country, has not kept pace with the rapid growth in global economic integration. So what they’re saying is we have global trade, globalization. We’re all trading with each other, which is great. The problem is that the payment system of how we pay each other, it hasn’t kept up.
It hasn’t actually hasn’t really gotten any better at all. The global network of correspondent banks, I just mentioned that, that facilitates international payments is hindered. It’s hindered by what? By high costs, by low speed, and by transparency. We just don’t trust that system anymore. Like Russia, getting their banking account seized because of the Swiss system. They don’t trust that system anymore. They want a new system and operational complexities. So there’s lots of problems with that old system. They want a new one. It leaves many participants, notably emerging markets and developing economies without affordable access to the global financial system.
So the US dictates who gets to be on the financial system. Like Russia, you don’t get to be on the financial system. Iran, you don’t get to be on the financial system. If you happen to be a teenager that happened to be born in one of those countries, you don’t get access to the financial system. So they’re talking about that. And they’re talking about multiple CBDCs, arrangements that directly connect these different jurisdictions, these countries, offer significant potential to improve the current system. Yeah, current system sucks. There’s lots of ways that we can improve it.
Of course, there’s a much easier, better way to improve it. We’ll come back to the end. The BS Innovation Hub, Hong Kong Center, Hong Kong Monetary Authority, Bank of Thailand. These are the people that have been working on it. The Bank of China, et cetera, has been working on this to build a multi-CBDC platform known as Enbridge. So that’s the what and the how. Let me show you kind of how this thing works. Here’s an illustration. I pulled off the BIS website. So basically how this works is you have these different central banks here.
So here’s Hong Kong. Here’s China’s bank. Here’s Thailand’s bank. The UAE has been in this for a long time. So the Middle East, the UAE, oil producing nations, Saudi Arabia, they’ve been in this. So we sort of have the banks here and they can each have their own currency, right? So like the BRICS, they all want to have their own currency. But the problem is, is like, how does it work with all these different currencies? It makes it very messy. Every time I go somewhere, I have to exchange, I have to trade.
So they don’t, they want to fix that problem. And so they’ll create this bridge right here where the currency can come in and this currency can come in and they can swap for each other and get sent back out. So it’s basically, it’s a hub that allows each country to use their own. And this hub will then be the single money changer of the world, if you will, right? They’ll exchange everything. Here’s another picture that I got directly off of the website. So you can kind of see how this works.
So you have a central bank right here. This might be like the Federal Reserve in the United States. And then you have the commercial banks. I hear this might be like Wells Fargo, JP Morgan, Citibank, etc. So you have the Federal Reserve or the central bank of each country. And then each of these individual banks all coming into this middle where all of them can be exchanged in real time. So that’s how they want this to work. Now, it’s a little bit scary though, is here’s another image that I pulled off there is that what we can see here is that we have a central bank here.
So central bank number one. Here’s central bank number two. China, India, whatever, put whatever you want there. And they talk about going to a private sector bank right here. And then all of these are the different things you can have cash, credit cards, a bank account, electronic money, etc., right? But what they show is that each one of these connects down to the central bank, not to the main commercial bank. Now, the problem with that is that we centralize the banking system. Right now, the banking system is still somewhat decentralized.
And as we centralization, as I say, centralization always leads to manipulation. So this is a big danger. I’m not going to go deep into that. But that’s a pretty scary graph if you know what I’m talking about. Okay, if you want to make a whole other video on that, let me know in the comments down below. I’ll go deep into that subject. So you might be asking yourself, so what? So what does this mean? So Saudi Arabia didn’t really ditch the petrodollar agreement because there wasn’t really one there. I mean, they’re still going to use the dollars, right? But yeah, they’ll use other currencies.
So what? Well, here’s what this means. Here’s why this matters. We are living through history right now. We’re literally watching the international monetary system be rebuilt from the ground up right now. And what we’re going to see, what I predict is that the dollar dominance will continue its path. What path am I talking about? It’s not like, oh my gosh, the dollars in your bank are worthless tomorrow. It’s not that. It’s not that like in six months or 12 months, boom, the dollar’s gone. It’s not that. It’s that it just continues the path that it’s on.
Right now, I showed you another chart. We had gone from about 80% down to about 60% of global share of trade. And that will continue. It will be 50% and then 40% and then 30% and then 20% and it will just continue like that for a long period of time. So I believe it’s a process, not event. So, so what, what does that mean? Well, what it means is that if less countries are using those dollars, see, because the US is able to print dollars and ship them off to the world, when those dollars stay out there in those other nations, that inflation stays over there.
If those dollars come back to roost in the United States, that inflation comes back with it. So the US, I live in the US. Anybody else that lives in the US has a good benefit, right? We don’t have to deal with that high inflation other nations have because we have that currency. But the problem is, as the currency gets weaker, inflation goes up. So they work like this. So prices going up doesn’t really mean things are getting more valuable. They’re not going, the prices aren’t going higher. It’s that the dollars to buy them are getting weaker and weaker.
So it looks like this. Here’s the consumer price index, CPI. So CPI, the price of goods and services is going higher and higher and higher. Over here is the purchasing power of the dollar. So it’s not so much that prices are getting higher. It’s that it takes more dollars to buy those things, right? So it works like this. So as we continue this trend, going from 80 to 70 to 60 to 50 to 40, this will continue to get higher and higher and higher, faster and faster and faster. So what does that mean? Well, that means for you and I, well, and anyone else in the world, the cost of living will continue to go up.
It’s going to continue to go up faster than the rate of what your pay is, which means the quality of your life is going to continue to go down. That’s what this means. So that doesn’t sound very good. So the problem is that we are going to have to learn how to beat this debasing. That’s what we call debasing the currency. Now, right now, this is a chart showing the S&P 500 and global liquidity. So the black line is the S&P 500. The orange line is a global equity. I’ve shown you this chart a couple of times.
So you look at the S&P 500 and go, oh my gosh, I’m getting rich. It’s going up by eight, nine percent per year. Look, at some point, I’m gonna have a million dollars in my S&P 500 account. Well, not really, because what this is showing is that the S&P 500 is basically moving up at the rate of the money supply increasing. It’s keeping up with debasing, which is great. At least you’re not going underwater. At least you’re keeping your nose above water, but you’re not getting ahead. All right. So your purchasing power isn’t growing.
It’s just kind of staying the same. But here’s the problem. If the money supply is increasing at about 8%. And then we have consumer price inflation of, I don’t know, call it 3%, call it 4%. Then what we really have is 12% what we call our hurdle rate. That means you need to grow your wealth by at least 12% to actually be staying ahead. That’s the real number that you have to watch out for. Not the phony 3%, 4% inflation number that the government wants to tell you. This is the number that you have to deal with.
And it’s only going to accelerate as this project end bridge, as more countries continue to move this, and we continue to move into a new system and leave the old system behind. Now, again, it’s gradually, then suddenly. So eventually, there’s a switch. Sort of like when the dollar took over from the pound sterling about 100 years ago. It took about a 30 to 40 year process. And then the world sort of got together and said, okay, we’re going to switch over now. So it was about a 30 year, 30 to 40 year event.
And then it happened. Okay, so if you want to know more about this and you want to know where the international monetary system, not just the US or China, but where the whole monetary system is going and why and why this is ultimately going to fail. I got another video right here. You should go watch. Otherwise, give me some likes. If you like this video, if not, you can give me thumbs down. It’s okay. At least leave me a comment and tell me why. That’s what I got to your success. I’m out.
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