The Group of Seven is frequently referred to as the most advanced global economies. This group includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the US. I see this group as all headed in the wrong direction politically, economically, and financially. These countries are all drowning in debt and politically led by the biggest clowns on earth. The bonds between Europe and the United States are toxic in their own right. The Group of Seven has been able to completely ruin its financial position through the reckless money printing and never-ending spending exhibited over the last few decades. These mistakes are now coming home to roost.
BRICS is an abbreviation for Brazil, Russia, India, China, and South Africa. These economies could collectively dominate in twenty or thirty years. This region of the world has the chance to overthrow the US and Europe for expansion. The BRICS are headed in a much better direction than Europe or the US financially because they have low labor costs, favorable demographics, and abundant natural resources at a time of a global commodities boom. They also hold something that can collapse our financial system. BRICS hold and possibly are getting ready to unload a great amount of US debt that they own. This brief article will concentrate on the effect that the unloading of this US debt will have on the US financial system. If you think the banking crisis could be bad, you haven’t seen anything yet.
The US and Europe thought they were punishing Russia by weaponizing the dollar and sanctioning them for the Ukraine conflict. Western-sanctioned Russian crude oil exports, offered at discounted prices, have been re-directed to China, India, and (less importantly) Brazil. More importantly, Russia in 2018 had gotten rid of over 96% of its US debt holdings and bought gold instead. This is looking very smart right now as interest rates are rising and bonds are imploding at banks all over the world. We have talked about this for years and unfortunately, events are coming to a head very soon.
The BRICS are doing more business outside of the US dollar
The BRICS are also making a conscious effort to do more business outside of the dollar. The US dollar for the last fifty years plus has been the world’s reserve currency. Having the world’s reserve currency is a huge advantage in creating a constant demand for your currency. It is important to know that the BRICS are doing more oil business outside of the US dollar recently. It is not important to go over each deal or to know exactly how much, we just know that it is occurring. We know that the US dollar as the world reserve currency is headed in the wrong direction. This doesn’t happen overnight, but there is no doubt that the trend for the US dollar is in the wrong direction. Our leaders have no answer for this, much like no answer for anything else. I mentioned before “clowns.” The BRICS action concerning the US dollar is devastating for our financial system and the value of our money.
BRICS hold substantial US debt
Brazil holds $230 billion in US Treasuries. Russia unloaded the US “toxic” debt a few years ago. India holds $220 billion and China holds $900 billion. So roughly we see 1.4 trillion dollars in US debt that these BRICS are holding. BRICS International Forum president Purnima Anand reported recently that three more countries — which included Egypt and Turkey along with Saudi Arabia — could join the BRICS group very soon.
Now to show you how toxic our debt situation is, the average government official would say, “No big deal, we can just print more money and buy all of the debt back!” If these bonds hit the open market, even if it’s only $1.4 trillion, who is going to buy them? The Ponzi scheme which is our financial system will be even more exposed. We can just use more fake money, yes that has to be it. A coordinated selloff by the BRICS of this US debt will be devastating to our financial system.
Our leaders are incapable of avoiding a collapse
We are already seeing what is happening to the banks because they are upside down on their bonds. The banks are sitting on huge losses. When you sell a great deal of something at one time, the prices need to go way down often to attract more buyers. Not to mention if the Fed prints more money out of thin air, then forces banks to own these bonds; it’s more catastrophic news for the banking system. Maybe the US Government will just force average investors to buy their bonds? The BRICS can cause damage to the US financial system with a coordinated selloff of their US Treasury bond investments. Is leader Joe going to keep them invested? He can’t even walk up a flight of stairs to board an airplane or even ride a bicycle without falling. You must be kidding me.
Why is the banking system in crisis? The easy answer to that is fractional banking, abnormally low interest rates for decades, enormous money creation, leverage, derivatives, inflation, and now higher interest rates. The real issue is that the bubble is enormous. We didn’t have $300 trillion in global debt in the 1970s. We didn’t have $90 trillion in US debt in the 1970s and over $200 trillion in unfunded liabilities when Volcker was combating inflation. We didn’t have countries in the 1970s that now hate us that hold trillions of our debt.
To make matters worse, banks and governments think they are hedge funds. We have written about this many times as well. Things get sporty when you are on the wrong side of a trade. All of this debt is now on the wrong side. The results of the BRICS and other institutions will be devastating to the health of our country and to the health of our financial system. It is only a matter of time before our financial system collapses. No amount of money printing can stop it. No fancy names for money printing can stop it. Most people who speculate with all of their money will lose it all over the next few years.
You don’t have to be one of these people who lose it all because our system and our leaders are clowns and shams. Create your own gold vault today. Start to build your own gold standard today. Your retirement survival kit is up to you. Central banks around the world are creating record amounts of paper currency for you. In the meantime, central banks are buying record amounts of gold for their own coffers. They are pushing the crap on us, and hoarding the good stuff for themselves. You can do something about that today.
