The Secret War on the US Dollar — BRICS, Iran & the China Strategy

What does it do to China specifically, this operation in Iran? Trump had a plan. Cut China's oil off, increase energy production, energy independence, and get more people relying on U.S. energy to make up where Venezuela and Iran have fallen off the map. I'm sure if he hasn't already, he's joked about it, calls up President Xi Jinping and goes, look, I know we cut your oil off at that really cheap price of $50, but we've got something better for you. United States oil, it's only $100. Buy from us. Today we're joined by Christian Briggs, CEO of Hart Asset Management, an expert in global markets, geopolitics, and precious metals. Christian brings a unique perspective on how economics, politics, and global power intersect. In this conversation, we'll discuss the rise of Briggs, why he compares it to a cartel, and how the conflict with Iran could have major strategic implications, not just for the Middle East, but for China and the global balance of power. This is Bay Area Innovators, and I'm your host, Steve Vispas. Christian, welcome to Bay Area Innovators. Well, thank you so much for having me. Great to have you here from Nashville, Tennessee. We'll talk about the Iran conflict. We're going to talk about how it implicates other world powers and economy. But first, give us a bit of background of what you do, what your company does, and your expertise in economics. Well, thanks again. So, the company we built took about 41 years. We started in Dallas, Texas. Of course, I'm here in Nashville, Tennessee right now, half the year. And Dallas is where we started going back to 1986. Gosh, I have to think about that. So, about 40 years. We're going into our 41st year here soon. And what happened was we started off as a small retailer in precious metals. Everyone thinks gold and silver, but we were actually big into the gold, silver, platinum, palladium, and rhodium, which are platinum group metals. And we built a business that sells to both financial institutions, like banks, hedge funds have bought a lot from us over the years, individual family offices, all the way down to the small retail customer that might come in for just a few ounces of silver or gold. And what's interesting is that we were able to take that business and kind of bake in a little bit of the precious metals, but expanding that into platinum group metals, because we did start in gold and silver. And, of course, the platinum group metals are now pretty critical in both defense as well as next-generation nuclear energy. And that's how we started. It'll be 41 years here this fall. Now, we want to talk about some of the dynamics of the world economy. And let's start with BRICS. Give us a bit of background on what BRICS is, how it operates, and the countries that's part of it, in case our audience is not familiar with it. Well, it's a great question, because the last time I mentioned the word BRICS at a dinner meeting because they came up with the Iranian thing, I literally had a gentleman say, well, are we talking ACME BRICS, red BRICS, baked BRICS, or what kind of BRICS are we talking? I said they're the building blocks of a coalition that China started with four other partners and basically kind of got them organized in 10, came out in 2012 as kind of a coalition, a united front of, I'll call it the concerned countries of the world. And their aim and their goal to this day, nothing's changed. And they've expanded their members and their partners to about 21 currently from the original five, which was, of course, Brazil, Russia, India, China, and South Africa. And let me explain why those were the first five founding members. China, who put this together, started in the 1850s when the occupation of Hong Kong from the British would try to squeeze the Chinese into submission. They basically said, look, we are going to be running Hong Kong. You will allow us to run Hong Kong. We will exploit your resources on your mainland. We'll exploit the economics of what Hong Kong may represent in the future. So they submitted basically a plan. China wasn't real crazy about it, so they put them into submission until they submit to the plan. China never forgot that. In fact, they never forgot that, and they never forgot the opium wars, which was in the early 20th century, 1900, 1905, 1910, up to World War I, where the U.S. and primarily British, but the U.S. was involved. We got, say we, we being the United States and others, they got the Chinese hooked on opium. Why not? Get them to be good drug addicts, soften their position in a less hostile manner, less aggressive. We can exploit them further. So the Brexit was accumulation by China. China won. And the rest of them went along because there was more of a financial gain rather than a post-vigilante, you know, vindictive method, to the reasoning why, which is what China really did it for, and then financial gain as well. But there was definitely some, we're going to come and get you back later. So the BRICS led by China was an effort and continues to be an effort to rein in the financial power of the Western Europeans, some of the Eastern Europeans, and, of course, the United States, to underline the financial value, the financial success, and underline the financial sovereignty through a national security problem by underlying an attack on the U.S. dollar. To destroy the currency of a nation, you control the outcome. So if I can destroy a currency of any given nation, I can literally guarantee that that nation is going to have issues going forward with anything that it's going to do because once a currency is deemed to be worthless, it's worthless. Now, Iran is part of BRICS currently, including there's Cuba, there's Belarus, there's Bolivia, there's other what they call member countries and partner countries. But Iran seems like it's a member country. What is the real goal of BRICS? Is it to use a different currency than the U.S. dollar in the world economy? Is that their main goal? Oh, 100 percent. The whole goal of the BRICS nation is to undermine the U.S. financial system by systematically destroying the use of the dollar in everyday transactions on a global basis. For both in what they call in-border or across-border transactions, the BRICS nations have now convinced many of the countries, not just members or partners, but other countries, to utilize their local currencies. And when doing international trading or international transactions, the yuan, Y-U-A-N, which, of course, is the national currency of China, to utilize that currency for even larger transactions. If they can get them to use it in-border, in the country of their partners, and they do this through trade agreements and other different cooperation agreements, and underlying the destruction of the dollar by the very nature that no one's using the dollar nearly as much, so the demand drops. And look at what's happening with our interest rates. The dollar is under assault and has been for nearly 50 years by China. So the way it would work in the world economy is, let's say, Saudi Arabia sells oils to any country, let's say, China or something. In the past, they were using the U.S. dollar as the currency, as the petrodollar, as they call it. But now that's being changed, so they will use the Chinese yuan instead, right? Yeah, they're doing that. Now, I will say that if you look back at the last 20 years, they really started to make some headway. Not a ton, but they came far from zero. I mean, it's easy to start from zero because everything you do is up. However, in the last five years, they made a tremendous amount of headway in localized currency transactions and cross-border payments to be sent and utilized in digital yuan. If you go and look at the past two or three years, the digital yuan has now transacted well over $1 trillion in transactions, which means, and that may sound like a lot, still small incremental amounts compared to dollar transactions on a daily basis, but that's $1 trillion less for the dollar in usage and $1 trillion less in demand for the dollar, which means a lot of countries are not utilizing the dollar or using the dollar to serve as the top reserve asset. China's been able to have the dollar displaced, and it's not even number one, two, or three as reserve assets among countries. What's the percentage now of the U.S. dollar usage versus other currencies? On a daily basis, we're still hovering between 49.5% and 51%. I mean, it'll fluctuate from month to month or quarter to quarter depending upon some of the, for example, the oil right now. China's doing quite well in Russia. They're using the digital yuan. The dollar is being brought back, I think, to the forefront, but not in a meaningful way yet by the current Trump administration. They're demanding that for these trade deals that we do, you must use the dollar as the only currency for transacting with the United States. Okay, that's great, but remember, we have about a $32 trillion economy, which everyone's like, well, that's huge. China has a $22 trillion economy. Now, these are the two largest, but when you look at the partners, the members, and the cooperative agreements that have been put into place with countries outside the BRICS nations, they have about a three times larger GDP and about a 60% larger daily usage in some of the local currencies that are being utilized, whether it's a rupee, a ruble, a yuan, a peso, or any number of other things that would circumvent the use of the dollar. So, China was not stupid. They knew the United States was going to push back. They didn't realize how aggressive we'd be until Trump took office in 16 and how he retook office in 24, where now he is making the dollar our national security policy so we don't have higher interest rates. But right now, it's still a struggle. Please explain a little bit. What are the advantages for using the U.S. dollar as the currency for trade, like the main currency? What are the advantages for the U.S., of course? Well, what the advantages are for the U.S. is that it stays in demand. For example, if everybody buys a stock, let's take Intel. Let's just say Intel for it. The stock has gone up about 400% in the past 12 months, Intel has. Now, when you think about that, that's demand greater than the supply, but it's a fundamental reason why it should be. Intel's earnings and revenues, market share is going back up. So, that's a legitimate argument of a legitimate asset you want to own if you're a long-term investor, and if you believe that the asset will continue to maintain and or grow its value. Sounds reasonable. The U.S. dollar has been losing ground over the last 45, 50 years. When looked at from 71 to today, it's lost about 98% of its buying power. The interest rates, the interest rates over the past three years in the United States have been elevated from late 20, early 21 through, it started like 23, late 23 or early 22 until early 2023, and we're still elevated. What's pushed, it pushes downside pressure on U.S. dollar-based assets like treasuries, bonds. I think yesterday we hit 5% on the 30-year United States treasury bond. Nobody likes that unless you're buying now, but if you had bought four years ago until you go to duration, you've taken a substantial, we call it beating, a decline on the bond because 45 years ago it was paying 1%, now it's paying 5%, but if you bought it at 1%, the value of your bond has dropped probably about 30%, 25% to 30%. The fear is that the dollar will continue to weaken if we continue to increase our debt, our deficit spending, and China continues to convince world leaders and countries, central banks, to adopt a different currency, different currency as a daily in-border or cross-border transactional monetary policy. Now, let's go to the Iran conflict, and in your opinion, what does that do in addition to other things, but what does it do to the world economy, the operations that happen in Iran right now? Well, I like to think that it's actually pretty good for some countries, but very badly and very detrimental to the working class of the majority of countries, and I'll give you why. When you look at the predominantly large-scale oil producers, countries in the Middle East, a handful of countries in Latin and South America that have oil on land and offshore in the Gulf of Mexico or Venezuela, Guyana, and then you look at the United States, think about this for a second, okay? Even the United States is having a resurgence in its energy independence and energy policy, where some people think the United States is getting hurt by having oil at $100 a barrel. It's not. It's actually profiting more than if oil was at $60. We're actually doing better because the oil energy sector is now exporting more oil than any time in history. So for the Middle East and for the dominant countries that produce a decent amount of oil and gas, probably both, actually, and then sells that or sells that plus chemicals, petrochemicals and other lubricants or oil-based products, they're crushing it. They're doing fantastic. The jobs that are going to be created in the oil sector here in the United States could be in the two plus million if oil stays above $90 a barrel, which it could. Even after the Iran-United States conflict is put behind us, it could stay at $90 plus. There's reasoning behind the estimates that I've seen. I agree with many of the analysts around the world. When it started, I said, if this stays high for long enough, it's going to stay high for many, many years to come. That benefits the United States. We sell oil called light, sweet crude. It's the best oil in the world. It's the most quality, cleanest, best for refining. We buy heavy, sour crude for substantially less than what we sell, our light, sweet crude. If we're selling millions of barrels a day, let's just say for $100, $100 a barrel, and we're paying $70 for the oil that comes back, then we're doing pretty good. I like those numbers. Most companies sell for $100, pay $70, that's a good deal. That adds more jobs. We're actually doing good, but the rest of the world, the countries who do not have the oil-rich opportunities for direct drilling or some type of online or offline or offshore, they're hurting, and it's going to hurt their economy significantly. What does it do to China specifically, this operation in Iran? Well, it's a two-part question, Venezuela and Iran. Let's go to two parts. Venezuela is what they call the chokehold. When President Trump said, we're going to liberate Venezuela from a communist socialist regime, very similar to Cuba, North Korea, any other country that's tried socialism, it doesn't work, but they try it anyway, okay? Square peg in the round hole, good luck. Well, what happened is about a quarter of their oil to half their oil was going directly to China. In some cases, it could be delivering all of it on a given month or a given quarter. There was obviously some oil staying in-house for the benefit and the needs of the country, and then some were sold to other smaller countries. But at the end of the day, China was getting sometimes all of it, part of it, some of it. It was a threshold at a discount to keep their energy policy consistent. See, it's not just the amount of oil they were getting that they needed, it was the consistency of the price point. It was lower than average, than the average price per day, and the average price per day was pretty stable. In the last four or five years, we've had some stability within the oil markets. I mean, it goes up and down, but $60 to $70 a barrel was pretty consistent. So China lost the consistency of supply. They lost the consistency of price discount, which helps your economy, lower inflation because obviously it's a lower cost of products, and they lost a consistent price point, which means not only did they get it at a discount, the discount was steady. In other words, the price they were paying below market was steady. Now they have a chokehold. That takes us to Iran. Iran was selling them enough oil to cover probably 10% to 15% of their daily oil needs, as was Venezuela. So somewhere between 20% and 30% of the oil that's needed every day and used in every industry. Guess what? China doesn't have that. Russia can make up some of it, but not much. You know what's funny is the United States, like Trump, I'm sure if he hasn't already, he's joked about it, calls up President Xi Jinping and goes, Look, I know we cut your oil off at that really cheap price of $50, but we've got something better for you, United States oil. It's only $100. Buy from us. And you know what? Xi Jinping probably kind of hung the phone up and goes, Yeah, thanks a lot. Appreciate that. Click. So don't be surprised if China has not already looked upon the United States and helped. Now, they may have to circumvent the United States for a while, but they cannot go forever because there's no other supplier in the world that can give them the amount of oil that they need every day because their economy is growing. I mean, it's still doing this. It's not this. It's still growing up. So their daily, weekly, quarterly, and yearly needs are going to continue, even though they're transitioning to solar and wind, trying to get off the oil and gas dependency train. You've got to have some of it because you're going to need a plan B when there's no wind or sun. You've got to have conventional energy methods. Absolutely. Now, that all sounds good except the price we see at the pumps. What do you have to say about that? Is that going to change, or how is that going to? Yeah, I don't think they're going to come down anytime soon. So I would say this. Buckle up. Budget up. Cut where you've got to cut. But don't be surprised if the economy grows substantially the rest of this year, third and fourth quarter, will start picking up if oil stays high. The oil energy sector is one of the largest parts of our economy when oil is at this price. We could see two-plus-million jobs created in a direct fashion, and then how much extra money is that going to bring? I'll give you some real-world numbers. The oil industry, the companies, like your Exxons, your Mobils, your Conicos, your Chevrons, Oxy Petroleum, and so forth, these companies were expected to make between $64 billion, $63 billion, and probably $70 billion this year on the pre-Iran conflict before it happened. That's not bad. That's good money. A lot of taxes paid. A lot of that cash goes to bonuses in various markets, Texas, Louisiana, Mississippi, Missouri, Pennsylvania, California, they're all oil-rich states. Now, here's what helps the country. Now we're at $100 oil, so those profits are going to be $150 billion, $200 billion. Now, that much more money is coming into the economy. Think about that for a second. We're selling oil. That's fresh billions of dollars a day, higher bonuses, higher stock options for the people that work in the oil industry, the dry cleaners, the grocery stores, the Little Mom and Pops, the Walmarts, the Targets, the Taylors. You think about the restaurants in these communities where these oil companies are heavily domiciled with lots of employees from upper management all the way to people that work on the rig, small communities where a lot of the oil-rich companies, they drill in small communities. You're not going to get oil wells in downtown Dallas, but you've got management, downtown Houston, management of big oil companies where they drill offshore. West Texas, East Texas, North Texas, South Texas, small towns are about to get a massive influx of cash because they're all going to be richer, more jobs, more industry, more sales or exporting. Trump had a plan. Cut China's oil off, increase energy production, energy independence, and get more people relying on U.S. energy to make up where Venezuela and Iran have fallen off the map. Fascinating. Very interesting. Another aspect of this, I recently saw reports that Russia is allowed to sell some of its oil to different countries, and they would be selling it in U.S. dollars, which would be a reversal of their policies so far. I think that happens on a minor scale for now, but what would the implication of that be in the long term? Well, that's a good point you made. It's a great question. Most people missed that, but I'm glad you asked that because that wasn't a big headline for very long. It was out there for a brief moment, and then it kind of just went away. People were like, what is that? Good point. Glad you caught that. Okay, so here's what it means. What it means is Russia has understood the importance of U.S. dollar trade. By trading in U.S. dollars, you are trading with the United States, and we like you. We like when you help us, and we help you. We don't like it when you use a currency that could hurt us. Who wants that? Who wants that? A true partnership is where both parties agree to something. That equalization becomes the norm. In other words, we're going to get exactly what we expect. No one gets more or less, even though we sometimes think we gave up more than the other guy, and that's okay. But right now, Russia is playing as if they're wanting to be a long-term partner, which they do. They're giving us the assurances that they're going to be a long-term partner, which they are, because trading in the dollar, Trump likes that. I like that. You like that. It helps everybody. So the implications is that Russia sees, at least in the near term, a significant value proposition to trade in the dollar, become Trump's friend, friend of the United States, versus China. And that says something for Trump's negotiation power. Now, China still controls a very large percentage of the resources. How is that playing into all of this? And even with Iran and Venezuela out of the picture, that's still the case. Can you talk about the percentage that they control, and who is it? Is it all the Middle East, or how do they control it? Well, they control it through very cleverness. We call it predatory lending. So I come to you, and I say, Hey, Steve, you and your partners, what I want to do, and I want to tell this guy or that guy or those people, the leaders within countries, leaders within countries, I want to say, Hey, I'm going to give you a billion dollars. And everybody's like, Whoa, that sounds fantastic. Thank you. Muchas gracias, amigos, they would say. And China says, She-she, you're welcome. So basically what happens is the billion dollars goes to the country. The leaders build bridges, roads, hospitals, schools, infrastructure, airports, police, everybody wins. However, you know how they guarantee that loan? With the natural resources of a country. All I had to do to get that billion dollars is I put up my gold reserves right over here. China says, You just put those gold reserves that you have in the ground to us, and we'll call it even. Okay, never realizing we can't pay. How are you going to pay it back by building schools and roads? Commerce may pick up. You may get some smarter kids, but that's 50 years from now. We're a real industry of generational. It's gonna take generations to create the value in the economy to pay that money back. China knew this. So they said, Don't worry about paying it back. The gold over there, that's not yours anymore. No, no, no, no. That's now China gold. No, no, no. You thought it was your gold. Sorry. China gold. It's brand new name. We like it better. Has a better ring to it. And you're like, Wait a second. I need my gold. No, we've already paid you for it. No, you've only paid me a billion dollars. There's 10 billion in gold in there. Oh, we know. Thank you. We appreciate the profit. We're gonna buy you a steak dinner next week when we see it. When we're mining your gold, now our gold, we'll buy a couple of steak dinners. That's called predatory lending. They knew. They knew that the small countries in Africa, South America, they knew Africa. They knew South America, Latin America, Asia, Australia, even parts of Europe. China knew it is 100% inconceivable that you could pay that money back. And they were buying stuff. Look at Afghanistan, Pakistan, India. They did deals with South Africa, South America, countries galore. They control up to 90% of the rare earth natural resources of most countries. That's a scary proposition. Now, let's talk about Iran and Afghanistan for that matter. Did China build infrastructure in Iran and Afghanistan? Oh, yeah. They did it very cleverly. So it was the same thing that they would own some of the resources in those countries? Yeah, yeah. Afghanistan, I mean, Afghanistan alone has some of the largest and richest deposits of just critical, critical resources for sustaining everyday life and to move into technology transition and transformation and the entire AI sector of both hardware and software as well as transportation. And so when Xi Jinping, the president of China, alerted Biden that he had 30 days to get the heck out of Afghanistan, or he would be more exposed for his corruption of him and his son Hunter, who are both walking brain donors when it comes to policy, international and domestic policy. They were told, Biden and the administration by the CCP, China, get out. You have 30 days. Within that 30-day period, we got out. Of course, it was chaos. Thirteen beautiful, wonderful, brave men and women serving in our military were unfortunately killed because of the way in which the madness was deployed through Biden. After the 30 days, what happened was within 24 hours, China has signed a treaty, a cooperation agreement for natural resource and infrastructure deal with the Taliban, who became the authoritative government regime running Afghanistan. And they were able to then cut a deal for billions, ultimately could be trillions of dollars in natural resources, all because corruption started the domino effect. Had Hunter Biden not sold secrets and access, had Joe Biden not accepted that bribe money, that corrupt money from China, then China would not have had the leverage because he wouldn't have been compromised. And we would have been able to not have 13 brave men and women killed that day at that point. And we would have still had our presence there and we would be working with a good democracy government and not a government that's known for terrorism around the world for years. I want to change gears a little bit and talk about something that I know you have expertise in, and that is the risks of digital currencies. Can you talk about that? What are the risks and how do you address them? Well, we've got a couple of different risks. It's a fairly significant list. In fact, just in the last 24 hours, there's been articles published on Daily Mail and others about central bank digital currency now coming into fold, coming into an understanding of deployment. In other words, we're not just in the research phase. We're not just in the pilot program, which many countries are. We're now in the launch phase. In other words, we're in an adoption phase where it's already being utilized across large scale territories and countries and states and providences. The risk is this, and those are great, great topics of conversation. You have two types of transactional tokens. In other words, tokens of value that have been around for years. You have decentralized, which means that it's a free flow system that minimizes government interaction, surveillance, and monitoring you in real time. That's called decentralized. Then you have centralized, which is the understanding that the centralization of power, the power at the top, central bank power, governmental power, then allows you to transact in a centralized manner, which means that the centralization of the transaction is being monitored and surveilled in real time. Within a millisecond, if the transaction is deemed to be unlawful or against government policy of any kind, or they don't like you, they can turn it off, stop it, reverse it, or allow it to transact. These are things that are not only here today, but they're expanding. The Euro, the very nature of the Euro is a centralized form of digital currency that allows the central bank in Brussels or the BIS, Bank of International Settlements in Switzerland, to do nefarious things, monitor your money, and if they deem it to be an inappropriate transaction with no lawful reasoning to do it, they can just turn it off, confiscate, keep your money, and what are you going to do? What can you do about it? You can't go there and tell them to switch it on. You're at their mercy, and you will comply. Cristian, we thank you so much for your time. In conclusion, what do you think is going to happen with the Iran conflict? What do you see happening in the next weeks or months? Iran will continue to get support from various countries, including China being the largest, and they will continue to hold out as long as they can economically. Economically can, which understanding is probably another 10 to 14 days, and if they try to go past that, it's only because they're getting resources that are being shipped in, but at this point, they've nearly reached capacity of oil storage, and if they turn their pumps off, they'll never get them to where they were before. You've got to maintain the consistency of the depletion of the oil from the well. In other words, the pumping of the oil, you must maintain it, or by turning it off or slowing it down, it could affect the pressure and the amount of daily oil that comes out. So they're going to come to a point where it's going to become economically unviable to move any further without cutting a deal. And Trump's saying, look, I'm ready, let's do a deal. No energy at all based on nuclear enrichment, none. Because you're going to lie about it. You're going to create weapons grade, so let's not do nuclear energy. If you want more windmills and solar panels, I bet you Trump will buy you a bunch. I'll buy you a ton. I'll say, you want those tomorrow? I'm going to put them on a C-130. We'll have those things installed tomorrow. But there's no energy for nuclear and weapons, and you do not control the Strait of Hormuz anymore. You've got to give it up. Very similar to what Trump's told Panama, China will not control the Panama Canal anymore. And they don't, because they tried. You see what happens when you control the flow of commerce. China controlled Panama, Iran controlled the Strait of Hormuz, and you see what happens with the detrimental effects. Great. Christian, we thank you so much. Appreciate your time. Fascinating. My pleasure. Thank you so much. Thank you for watching another episode of Bay Area Innovators. If you enjoyed this episode and you know someone who should be on our show, please send us an email at sfbay at epochtimes.com. We would love to hear from you. Thank you and see you next week.