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How the BRICS are challenging Americas supremacy.

Mason Finis Newsletter • March 7, 2023

As the 21st century progresses, a new world order is taking shape, with the BRICS leading the charge in global economic dominance.

 

The US dominance was clearly absolute for the past 60 years but the climax, was not achieved until 1971 when President Richard Nixon made the momentous decision to take the dollar off the gold standard. In recent years, the emergence of economies like the BRICS has signaled a shift away from Western economic supremacy and towards a more level playing field. While the BRICS may not yet be « considered » as major players in Europe, they are projected to surpass the G7 GDP by 2034.

 

The petrodollar system, where US dollars are used to buy and sell oil globally from OPEC+ member states, has underpinned America’s hegemony over the global economy for decades. However, recent instability in the world, including the COVID-19 pandemic and Russia’s invasion of Ukraine in 2022, has accelerated the transition away from the super dollar and towards a divided world of BRICS versus G7.

 

This shift could lead to the creation of a new master currency for trade, which would cause economic turbulence and potential sanctions, resulting in a cold war between the BRICS and Western countries. This could make it difficult to supply strategic resources, leading to geopolitical instability. Financial crises could also be linked to geopolitical instability, and massive migration could occur as people move from unstable regions to more stable ones, leading to social and political unrest.

 

To address these potential risks, international investors must consider several solutions.

 

Diversifying portfolios across different asset classes and regions to minimize risk exposure is crucial. Due diligence is essential before investing in any country or region to understand the risks and opportunities. Investors should partner with local experts who understand the market, culture, and regulatory environment. Flexibility and a long-term view are also necessary to adapt to changing market conditions, geopolitical risks, and emerging opportunities.

 

Additionally, we may witness the rise of cryptocurrencies being used to move money worldwide. Stable coins or bitcoin, not being subject to sanctions, could be widely used to move money from country to country. This could be an attractive option for investors seeking to minimize the risks associated with traditional currency exchange.

 

You need an advice or a quote ? Go to our Wealth Management page.

How finland is planning to become a Uranium producer

By Mason Finis Newsletter • February 20, 2023
Terrafame, a state-owned mining company in Finland, has been permitted by the Finnish government to extract uranium as a by-product from its mine in Sotkamo, northeastern Finland. This decision marks a significant step in Finland's plan to extract fossil fuels. Terrafame already produces nickel, cobalt, and zinc at its mine in Sotkamo. The company's plan to extract uranium was expected to begin in 2021, but due to recent pandemic problems and eco-protests, the project timeline was extended. The company intends to extract around 200 tonnes of uranium annually by 2026. The Finnish state owns 67.1% of Terrafame's shares, while commodity trader Trafigura owns 31.1%. Terrafame aims to recover uranium from the waste dumps at its Sotkamo mines, where it is present as a by-product of zinc and nickel production. The waste dumps also contain sulfates of nickel and cobalt, as well as other minerals. Terrafame CEO Joni Lukkaroinen believes the project will help create a Finnish uranium producer and play an essential role in Europe's energy balance. Nuclear energy does not lead to carbon dioxide emissions, making it an essential component of the "green agenda." Unlike renewable energy sources, nuclear fuel has the necessary generation stability. However, the average content of natural uranium in the ore does not exceed 0.7%, and the feedstock must be enriched for use as nuclear fuel. The only option for enrichment is the British URENCO, which owns several enrichment plants in Germany, the Netherlands, the UK, and the US. For the Terrafame project, URENCO's capacities will be used, meaning that the control of the vital uranium enrichment process will remain in a UK company's hands. Terrafame is already one of the largest nickel producers in Europe, producing around 28,600 tons of nickel and 54,400 tons of zinc last year. The new project has the potential to make Terrafame an independent uranium manufacturer and contribute to the Finnish economy, with estimated net sales increasing by around €25 million per year from €378 million in 2021. However, environmental organizations have raised concerns about the possible consequences for the environment. In 2020, the Finnish government authorized uranium mining, but ecologists asked the court to assess the potential environmental impact, pointing out Terrafame's past problems. Talvivaara, the company that previously operated the mine, had a major accident and eventually filed for bankruptcy in 2014. The Finnish government took over the mine and restructured it as Terrafame in 2015, with a new management team focusing on improving safety and environmental standards. Before the Sotkamo uranium extraction plant can be put into operation, the National Radiation and Nuclear Safety Authority must ensure that Terrafame's operations comply with the principles of the Atomic Energy Law. While projects for uranium extraction from dumps in Finland have been discussed for years, the level of uranium production in Finland is far from that of other suppliers, such as Uzbekistan or Niger, not to mention larger ones. However, with the help of the "green agenda," the project has the potential to attract sufficient investment and start to work.
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