Russia is closely monitoring the U.S. economy as discussions intensify about the possibility of debt default, according to Kremlin Spokesman Dmitry Peskov. This comes amid warnings by Treasury Secretary Janet Yellen that the U.S. government might be unable to pay its bills if Congress does not raise or suspend the debt ceiling by June 1.
The U.S. economy, along with the global economy, is currently facing some issues, with inflation expectations remaining at a relatively high level. Peskov pointed out that this was not the first time such problems had arisen in the U.S. economy, describing it as happening “incredibly regularly.” Dealing with the debt ceiling situation often involves finding solutions that had worked in the past. Since 1960, Congress has acted 78 separate times to permanently raise, temporarily extend, or revise the definition of the debt limit.
On one hand, addressing this recurring issue could potentially help the U.S. economy overcome its current challenges. On the other hand, the ongoing crisis highlights an inherent weakness in the economic system, urging countries like Russia to remain vigilant and explore alternate solutions.
Russia has also ramped up its de-dollarization efforts in response to the U.S.’s seizure of around $300 billion in the Russian central bank’s assets, frozen by sanctions. Russian President Vladimir Putin said that U.S. policies would backfire as Russia develops relations with friendly countries in Eurasia, Africa, and Latin America. In addition, Russia is discussing the creation of a common currency for BRICS member countries (Brazil, Russia, India, China, and South Africa), with the opportunity for an agreement potentially being reached in 2023.
While monitoring the U.S. economy for a potential debt default is a prudent move for Russia, it could also have negative implications for the global economy as nations may become more cautious in their dealings with the United States. Furthermore, the creation of a common BRICS currency could lead to greater independence and self-reliance among member nations, reducing their reliance on the U.S. dollar and having a significant impact on the global economic landscape.
In conclusion, Russia’s close observation of the U.S. economy in the context of possible debt default highlights the delicate state of the global economic climate. Whether the United States can find an effective solution to circumvent this potential issue remains to be seen. However, it is clear that countries like Russia are preparing for a possible pivot away from the U.S., exploring alternate economic avenues and strengthening ties with other nations.