The High Cost of BRICS Triumph: Ex-JPMorgan Executive Highlights Potential Impact on US Living Standards and Global Status
Jon Wolfenbarger, an experienced investor and former investment banker at JPMorgan and Allianz, recently wrote an article for the Mises Institute discussing the potential effects of BRICS (an economic coalition consisting of Brazil, Russia, India, China, and South Africa) on the US dollar and living standards for Americans.
Wolfenbarger notes that throughout history, all empires have eventually failed, and the US is no exception. He suggests that decades of irresponsible economic policy by the American government have created an opportunity for the BRICS nations to dethrone the US.
However, Wolfenbarger also acknowledges that the BRICS nations face significant obstacles if they are serious about competing with the US dollar. For example, they lack the reputation for enforcing the rule of law and have weak currencies.
Furthermore, the US has the largest and safest government bond market, as well as no capital controls, making it challenging for non-US entities with $12 trillion of US dollar-denominated debt to abandon the dollar.
Wolfenbarger recommends that the US government focus on creating a stronger dollar, reducing spending, and promoting peace over war to avoid losing its “reserve currency” status.
In summary, while the BRICS nations may have the potential to challenge the US dollar’s hegemony, they still have a long way to go, and it remains to be seen whether the US will take steps to maintain its global standing.
Clever Robot News Desk 8th May 2023