A BRIC Wall

So it appears that not every country is siding with Ukraine in its ongoing conflict with Russia. China and India abstained from voting on sanctions in the UN security council, and Brazil has just announced neutrality.

The informal alliance of Brazil, Russia, India and China, or BRIC for short, has stood its first major test. These regional powers are seeking to upstage the US unipolar world order, and much rides on how things pan out for Russia. If the West ends up folding in Ukraine, we may soon see a very different world order than what we've had since the fall of the Soviet Union.

The idea is not to have a single dominant power, but to have several powers, dominating their respective regions of influence. Brazil will dominate South America, Russia will dominate Central Asia, India will dominate South Asia, and China will dominate East Asia. Europe will revert to its multipolar past, and the US will be confined to North America.

Africa will be dominated by Egypt in the north and South Africa to the south, and many nations will fall into old constellations from colonial times. Australia and New Zealand will continue their alignments with Europe and the US.

None of this is hammered out in details. The point hasn't been to produce a comprehensive solution but to divide the world broadly between different powers, and not allow the US to dictate things beyond what can be considered its legitimate sphere of influence.

A probable consequence of such a new world order is a reemergence of old colonial ties, as well as old historic alliances. In the case of Portugal, it seems likely that it will develop closer ties with its old colonies, but this time as a nation among equals. Brazil will not only dominate South America, it will have ties to Angola, Mozambique and Portugal.

Portugal may become less focused on Europe, and more focused towards its southern brothers. It may also find it useful to firm up its 700 year old alliance with England, as a counterweight to Spain. There's also a 500 year old connection between Japan and Portugal that may re-emerge due to Japan's uneasy relationship with China. Japan may well want to be firm up its trading relations with the US and Europe as a counterweight to China's regional dominance.

The new multipolar world will not be free of conflicts, but it will be a more dynamic place than what we have today. There won't be a single power dominating the world, and there won't be a single currency dominating it either. The situation will be fluid. Currencies will come and go, and everyone will once again realize that the only reliable measure of wealth will be gold. There will be an informal gold standard among nations. When trust in a currency is lost, it will be dumped, and gold will be demanded in return.

The first example of this may already be unfolding. Gold is becoming increasingly hard to find. My local vendor is not as well stocked as it used to be. There appears to be a drain on the supply due to more than just a few gold bugs. If entire nations are scavenging for gold, it goes without saying that supply will be stretched, not only in the big exchanges in London and New York, but also for regional banks and other retailer sellers.

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