The BRICS summit is underway with talk of expanding the economic block and speculation about a “new currency.” Peter Schiff appeared on Real America with Dan Ball to talk about these developments, saying the BRICS nations will blunt Western dominance.
Brazil, Russia, India, China, and South Africa make up the BRICS block. It accounts for about 40% of the global population and a quarter of the global GDP. Peter pointed out that not only does the BRICS block supply a lot of goods to America, but it also loans the US a lot of money.
The interest that we have to pay on that debt is soaring.”
This backup in the yield on the 30-year Treasury — mortgage rates are going to hit 8% pretty soon. Think about that for a minute. When was the last time anybody was looking at an 8% mortgage? Just a year ago, they were in the threes. So, everybody is going to be paying more.”
And things don’t appear to be on track to get any better.
We are broke as a nation, and the inflation genie is out of the bottle. We’ve had more than 10 years of reckless money printing. There’s no way these rate hikes are going to do anything about that. So, high inflation is here to stay. And it’s going to get even higher.”
President Biden keeps saying the economy is strong. Peter asked how he could make that assertion.
We’re the world’s biggest debtor nation. We have record trade deficits, record budget deficits, and inflation that’s about to run out of control. I don’t think the economy has ever been this weak.”
Given the current state and the trajectory of the economy, the US is ripe to fall from its perch as the world’s economic superpower. And the BRICS block is in a position to further undermine the American economy.
Dan said he thinks the West’s response to Russia’s invasion of Ukraine pushed the BRICS nations into a corner and forced them to look more closely at an alternative to the US dollar. Peter said he agreed.
The blowback from those sanctions is going to be a disaster.”
When the Biden administration started imposing sanctions, we reported that there were possible long-term consequences for using the dollar as a tool for war — that it could accelerate de-dollarization globally and even threaten the dollar’s role as the world’s reserve currency. As Peter explained, this would be a gut punch for the US economy.
The US really depends on the dollar as the reserve currency. But what we did with those sanctions — we gave the world a powerful reason not to want to be a part of that system anymore because we demonstrated the downside, the risk that you take in holding dollars and being part of this dollar payment system. We gave everybody another reason, as if they needed more, to de-dollarize. So, that whole process has been sped up. The last thing we should have done was punish Russia for doing exactly what we wanted them to do. We wanted Russia to hold dollars because that benefits us. That keeps our prices down. That keeps our interest rates down. And then we punished Russia for doing exactly what we wanted them to do. Now, what kind of message are we sending to the rest of the world?”
This originally appeared on SchiffGold.com.