Seeds of Wisdom RV and Economic Updates Tuesday Afternoon 9-2-25
Good Afternoon Dinar Recaps,
BRICS Could Worsen US Debt & Deficit Crisis, JPMorgan Reports
De-dollarization trends may deepen America’s $36 trillion debt burden as foreign financing dries up.
BRICS Dedollarization and US Fiscal Risks
JPMorgan has warned that the BRICS bloc’s push away from the U.S. dollar could exacerbate America’s growing debt and deficit crisis. With the U.S. deficit exceeding $36 trillion, reduced foreign appetite for Treasury bonds is creating a fragile outlook for U.S. borrowing costs.
According to the bank, global financing for U.S. debt is waning as BRICS accelerate dedollarization efforts. JPMorgan cautioned that this could trigger bond market disruptions “within months or even years.”
Tariffs Backfire, Strengthening BRICS Unity
The Biden administration’s 50% tariffs on India and Brazil have had unintended consequences, reinforcing BRICS solidarity rather than weakening it.
India suspended arms purchases from the U.S.
Brazil deepened coordination with BRICS partners.
Brazilian President Luiz Inácio Lula da Silva underscored the bloc’s anti-dollar stance:
“I do not need to continuously bow to the dollar.”
Meanwhile, China’s yuan now accounts for over 50% of its cross-border transactions, up from 25% in 2020. Globally, dollar reserves have fallen from 70% to about 58%, while DBS Bank reported a 30% surge in yuan trade settlements.
Foreign Financing of U.S. Debt Declines
JPMorgan highlighted that foreign holdings of U.S. Treasuries have fallen to just 30% of total outstanding bonds, amplifying financing pressures.
The bank wrote:
“As the US government seeks to cut taxes to offset the impact of tariffs, financing needs are rising. Yet the world is now less willing to finance America’s deficit.”
Jamie Dimon’s Bond Market Warning
JPMorgan CEO Jamie Dimon echoed concerns about America’s fiscal trajectory, warning that the U.S. is running $2 trillion annual deficits—double the pre-pandemic levels of 2019.
“It’s a big deal, you know it is a real problem, but one day… the bond markets are gonna have a tough time. I don’t know if it’s six months or six years.”
Key warning signs:
Interest expenses now exceed U.S. defense spending and Medicare costs.
Moody’s downgraded the U.S. credit rating, citing debt ratios far above comparable sovereigns.
Reform Solutions for a BRICS-Driven Crisis
Dimon urged Washington to adopt growth-focused reforms to mitigate the impact of dedollarization and deficits:
Pro-business deregulation and permitting reform
Skills development and workforce expansion
Anti-fraud and efficiency measures in government programs
“The real focus should be growth… that’s the best way,” Dimon said, stressing that reforms need not harm the vulnerable but should reduce waste and abuse.
Why This Matters
JPMorgan warns that if BRICS de-dollarization continues, the U.S. could face a permanent erosion of its borrowing power. Rising borrowing costs and shrinking foreign support for Treasuries risk pushing America into a cycle of higher deficits, weaker trade flows, and diminished dollar dominance—outcomes with profound global consequences.
@ Newshounds News™
Source: Watcher.Guru
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