The Government Spending of BRICS Threat US Dollar’ reserve and also works to undermine its global dominance.
This ongoing BRICS initiative aimes at first place to reduce reliance on the US dollar.
As result of that the global reserve status of the United States dollar (USD) confronts a substantial challenge.
The venerable figure within the US bond market, Mr. Jeffery Gundlach, has raised a solemn alarm regarding this matter.
Gundlach contending that the trajectory of US fiscal expenditure is adversely affecting the standing of the USD.
The Federal Reserve’s imposition of high interest rates to combat inflationary pressures.
That contributed to the escalation of the national debt, reaching an astonishing total of $33.59 trillion.
Mr. Gundlach’s Cautions on BRICS Threat US Dollar Reserve matter
Mr. Gundlach underscores that the burgeoning debt quandary represents a significant peril to the future of the US dollar.
Also BRICS economic alliance has been actively engaged in endeavors to decrease their dependence on the US dollar at the global level.
This prevailing issue of lavish government spending amplifies their collective commitment to fostering the adoption of domestic currencies.
The convergence of these factors thus engenders a formidable challenge to the US dollar’s reserve currency status.
The overall stability of the US economy has encountered scrutiny in the current year.
The Federal Reserve implemented a protracted tightening policy spanning more than a year to counteract mounting inflationary pressures.
Also Read: BRICS Countries Benefit from US Sanctions, Saving Billions on Oil Purchases
The US government was compelled to engage in negotiations to raise the ceiling on its national debt.
This effort goes in response to surging and unparalleled levels of fiscal expenditure.
Mr. Jeffery Gundlach, the Chief Executive of DoubleLine Capital and a distinguished figure in the US bond market, underscores the far-reaching consequences of these developments on the future prospects of the US dollar.
He raises specific concerns, particularly in the context of the ongoing de-dollarization efforts within BRICS, indicating that the reserve currency status of the USD faces susceptibility in the face of unrestrained government spending.
Mr. Gundlach expounds that, “Should the Federal Reserve continue its policy of interest rate hikes, a plausible scenario, or should the national debt continue its inexorable ascent, an undeniable certainty, this predicament will further exacerbate.”
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