The President of the United States yesterday addressed world leaders in the opening session of the United Nations General Assembly calling for global unity. He itemized several problems facing the world community. The Ukrainian-Russian conflict, climate change, international sovereign debt, and new alliances were the key points of emphasis in order of priority.
What was not said is as important as what was said. President Biden called climate change an existential threat to humanity. What he didn’t say is that sovereign debt is a timelier threat. He implied that international debt is a less imminent problem stating that it would take cooperation among all nations to navigate it. To reference climate change as a threat to life, and collective debt as something a nation can live with, is to misunderstand the underlying pressures of geopolitical turbulence.
There are three power centers of geopolitical and economic concentration in the world today. They are the United States, Europe, and China along with their collateral, aligned partners and client-states. Much has been mentioned about the BRICS (Brazil, Russia, India, China, and South Africa). Other nations recently have begun the process to join as members. They include Saudi Arabia and Iran.
This may appear as if BRICS is expanding its influence by attracting nations desirous of realigning economically with China and Russia. The impetus is not China. The impetus is independence from the United States currency management and banking “kill switch.”
No country in the world, with the possible exception of France, is primarily concerned with climate change as the most critical short-term threat to their way of living. Most countries are dealing with economic and debt crises. The situation of climate change is like an individual finding themselves overweight. It took a while to gain the weight. And, it will take some time through discipline to lose the weight. Prioritizing climate change over ongoing deficits and accumulations of debt would be like a doctor in an emergency room recognizing a patient with a near fatal neck wound then passing them over for immediate care to a patient who has psoriasis. Both are serious problems, but one is much more serious to functionality of survivability than the other.
President Biden speaks of cooperation in navigating world debt when the United States is currently deficit spending a trillion dollars per year. The U.S. national accumulated debt just passed $33 trillion. This would be one thing if it only affected America. The U.S. dollar is the world’s primary currency. America abusing its sovereign rights to increase the world’s money supply through borrowing adds inflationary pressure to the world’s economy and makes it taxing and costly for its trading partners to move in and out of their own currencies to acquire strategic commodities like oil and wheat. The weaker the currency, the higher the cost.
In addition to what wasn’t said in President Biden’s speech is also who wasn’t in attendance to support his call for unity. Of the five permanent members of the U.N. Security Council, the presidents of China, France, Russia and the prime minister of the United Kingdom did not attend. Each of the absent leaders faces an economic and political struggle for posturing in their respective geopolitical zones.
The most powerful economy in the BRICS consortium is India. Prime Minister Narendra Modi was also absent. This is curious in that President Biden touted in his speech U.S. successful diplomacy in establishing the India-Middle East-European economic corridor (IMEEC). This was hailed as a ground-breaking effort to connect India to Europe through the United Arab Emirates (UAE), Saudi Arabia, Jordan, Israel, and Greece. Such an economic trade zone connects India to Europe through the Middle East without China as an anchor. Prime Minister Modi understands how pivotal the Indian economy is in the balance of power between Asia, Europe, and the United States.
Antonio Guterres, U.N. Secretary-General, has called for reform in the U.N. Security Council “in line with the world of today.” He believes that equity demands that the G20 nations contribute between $2-$4 trillion annually to developing nations for sustainable goals. He states that sovereign debt of poor nations is unfair and too costly. Systemic exploitation over decades is part of the claim by those acrimoniously demanding relief. To level the playing field, Guterres accentuates that it is time for a “global compromise” in the decision-making process.
If the United States truly wants to lead the world, it first has to recognize the real economic concerns, threats, and needs of every country in the world. The United States is oblivious to the fact that no other sovereign government can print and borrow money with abandon like it does. Left unchecked, accumulated debt will collapse the world economy. President Biden speaks of cooperation in navigating the situation of world debt. His overture is disingenuous. It is like someone standing at a bar counseling everyone to stop drinking or they may become intoxicated, jeopardizing their health, while the admonisher passes his glass to the bartender and says, “fill it up.”
The President of Brazil, Luiz Inácio Lula da Silva, did attend the General Session. His purpose was not to advance climate change accords. It was to call for coordination of developing countries to seek economic equity. He cannot do this on his own. He needs help from other developing countries. That is primarily why he was in attendance. Prime Minister Modi is more in control of his country’s own economic future. That is why he can afford not to attend. President Lula’s mission is to establish a BRICS currency independent and at parity with the dollar. He fears, like many countries, the United States policy weapon of sanctions and currency restrictions for countries that do not agree with America on government world policy. This “kill switch” terrifies left-leaning governments intent on socialism, totalitarianism, or authoritarianism.
If the United States continues to print and borrow money without respect for the consequences to the economies of the developing world, such countries with much weaker currencies will have few options or alternatives but to default on their debt. One or two countries failing can be aided by the World Bank. How many sovereign failures are too many to underwrite? There are 172 countries in various levels of development that fall into this category.
The Ukrainian-Russian conflict and the threat of Chinese military aggression against Taiwan are existing egregious threats. They can only be solved by ongoing diplomatic negotiations and solidarity of allied forces. Sovereign world debt, however, coupled with continued deficit spending, is a certain imminent existential threat to the stability of world society that can only be rectified by a commitment of all sovereign nations to comply with the discipline of currency management.
Navigating the world’s debt crisis starts with the United States committing to economic temperance as an example of leadership for all sovereign nations of the world.
My name is Marc Nuttle and this is what I believe.
What do you believe?
