Peter Schiff on the US detachment from China and the collapse of the dollar
Last week, economist and gold bulldozer Peter Schiff addressed several economic topics, including the relationship between the United States and China, in an interview with NTD News.
Commenting on Commerce Secretary Gina Raimondo's recent statement that “detachment is neither our economic goal nor our security goal,” Schiff stressed that “China is a country that needs a policy national security:
We cannot afford to detach ourselves, because we must recognize that China is both our main supplier and our main financier. The Chinese lend us money to buy the things they produce that we can't, and our entire standard of living depends on China's support.
“We will collapse if we lose that support. Now we are losing it, whether we like it or not. I think the Chinese realize that it is in their interest to move towards decoupling, and that is exactly what is happening,” described the economist.
Referring to efforts by the BRICS countries (Brazil, Russia, India, China and South Africa) to decouple from the use of the dollar, Schiff said: “Look what's happening with the BRICS nations. They had a summit , they are expanding their membership, they are striving to reduce – and ultimately eliminate – the relationship of dependence on the US dollar.” At the summit, BRICS leaders invited six nations to join the economic community: Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE). Some believe that the membership of oil giants in the BRICS group is a strategic asset for China and Russia.
adds the ship:
And if they no longer need dollars, they no longer need to sell their stuff to us, because they have enough domestic demand for their products. This means that the United States will be in big trouble, because we do not have the industrial capacity to produce what we currently receive from China.
“Contrary to what Biden says about some kind of industrial renaissance, this is all nonsense. The industrial sector continues to contract under his presidency and our trade deficits have reached record levels,” he added.
Schiff was asked how the United States could mitigate the danger associated with the economic relationship with China.
“What we need to do is reduce the burden that the U.S. government places on the U.S. economy and industry,” he responded. “So we need to see massive deregulation. We also need to see significant, across-the-board reductions in government spending to free the economy from the burden of that spending.”
He concludes thus:
So that we can again produce what we currently import from China and other countries, because if the dollar collapses – and I think it is inevitable, since it loses its role as a reserve currency – we will not We will not be able to consume unless we can produce, and currently our production capacity is hampered by the government.
Do you agree with economist Peter Schiff? Let us know in the comments.