Fred Smith, FedEx founder and executive chairman, warned that the BRICS nations (Brazil, Russia, India, China) seek to replace the U.S. dollar as the world’s reserve currency.
He tied America’s prosperity to three factors: post-WWII inventions, leading global trade protected by alliances, and the dollar’s reserve status.
“I think the issue is much broader than just the CPI that was announced today,” Smith said. “I mean, we’re the wealthiest nation in the world because of all these wonderful inventions since the end of World War II. But we’re also prosperous because we lead the world in opening markets for trade and protected those trade flows with the American Military and our alliances.”
WATCH: FedEx founder Fred Smith to @BretBaier: “The so-called BRICs alliance—Brazil, Russia, India & China—have set out on a deliberate course to dethrone the dollar. If that happens and we can't sell our bonds, I can assure you the living standards that we all enjoy today are… pic.twitter.com/fclTIKHw3A
— Steve Guest (@SteveGuest) February 14, 2024
Smith criticized the repudiation of trade beginning in 2018 and enormous government borrowing exceeding defense spending.
He said political leaders fail to address fiscal dangers, with parties focused on extremes over solutions such as trade.
“And then third, and probably equally important, we’re the reserve currency of the world, the dollar is the medium of exchange and our financial institutions control the movement of money around the world. All three of those things went together,” he said.
“And you had a repudiation of both trade beginning in 2018, when the trade wars began with President Xi and President Trump, and more recently, our government has been borrowing money at an enormous rate, almost $2 trillion last year,” he said. “And the CBO just announced that we’ll spend more on interest this year than we’ll spend on the Defense Department. These subjects are not even mentioned in our political discourse these days. It’s very concerning.”
“The political process is really focused on the extremes of both parties,” he said. “No one is supporting trade, which made America great, really, since Roosevelt and his Secretary of State Hall, passed the first major trading bill in 1934. And then we led opening the world and restored Germany and Japan, our enemies, to prosperity through trade and the American Alliance system.”
Smith noted America’s ability to print money relies on dollar reserve status, and BRICS explicitly aims to dethrone the dollar, jeopardizing current U.S. living standards if bond sales decline as a result.
“And then on top of that, our financial capabilities to print money at will is dependent on the dollar remaining the reserve currency,” he said. “And the so-called BRICS alliance — Brazil, Russia, India, and China — have set out on a deliberate course to dethrone the dollar. If that happens, and we can’t sell our bonds, I can assure you the living standards that we all enjoy today are going to be a thing of the past.”
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