Former US Secretary of State Hillary Clinton warned that a US default on its debt obligations could lead to a global financial collapse. She stressed that “if Congress continues to court defaults, calls to isolate the dollar as the world’s reserve currency will rise much more.”
Hillary Clinton talks about the US defaulting on debt and the dollar losing the status of the world’s reserve currency
Hillary Clinton, the former first lady and US Secretary of State from 2009 to 2013, warned in an opinion piece published by The New York Times on Monday of the catastrophic consequences that could result from a US default on its debt obligations, including the risk of the dollar losing its status as a currency. backup in the world.
“The debt ceiling debate is not about authorizing new spending. It is about Congress paying off debts it has already incurred,” Clinton described, warning: “Refusing to pay would be like skipping out on your mortgage, except with global consequences.”
Because of the central role of the United States – and the dollar – in the international economy, a default on our debt could lead to a global financial meltdown.
Noting that “the competition between democracies and authoritarian regimes has intensified,” the former first lady warned: “By undermining America’s credibility and the supremacy of the dollar, the struggle over the debt ceiling plays into the hands of Xi Jinping of China and Vladimir Putin of Russia.”
Clinton said: “Playing with the debt ceiling threatens the prominent position of the dollar in the global economy and the power it gives to the United States.”
The former Secretary of State explained that the US dollar is a central component of international transactions conducted by individuals, businesses and governments around the world. She stressed that they invest in US Treasury bonds and rely on US banks “because they trust that America pays its debts, adheres to the rule of law and guarantees stability,” adding that it allowed the US to impose sanctions, such as those imposed on Iran. and Russia.
“It is not surprising that Mr. Xi and Putin are so eager to disrupt the dominance of the dollar and lift US sanctions,” Clinton said, concluding:
If Congress continues to court defaults, calls to dethrone the dollar as the world’s reserve currency will rise even more – and not just in Beijing and Moscow. Countries around the world will begin to hedge their bets.
A growing number of countries are already stepping up efforts to shift away from using the US dollar in trade settlements, including ASEAN countries. Meanwhile, the BRICS countries (Brazil, Russia, India, China and South Africa) are reported to be working on creating a new currency that will reduce their dependence on the US dollar.
Do you agree with Hillary Clinton about the consequences of a US default? Do you think this will lead to the US dollar losing its status as a global reserve currency? Let us know in the comments section below.
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