The crisis in the Ukraine could trigger a series of events that would turn the United States into a Third World nation and lead to martial law in America, a prominent conservative believes.
That nightmare scenario could occur because the national debt has destabilized the American economy, Dr. Ben Carson says.
“What’d Putin say last week? He said if you put sanctions on us we may just decide that the American dollar will no longer be the reserve currency that we use,” Carson said at the 2014 Conservative Political Action Conference or CPAC. “Now quite frankly that’s not going to hurt us very much with just Russia. … But what if they got other people to do that? China has voiced some concerns. The UN committee in 2010 voiced some concerns.
Carson said later on the same subject, “We would become a Third World nation overnight. Occupy Wall Street would be a walk in the park. And all of a sudden, the things that would be going on in this country which would necessitate marital law … All this could happen very rapidly. We should be really concerned.”
The retired neurosurgeon and rising conservative star made that second set of remarks to The New York Meeting, a conservative gathering in in the Big Apple, on March 10.
The potential of martial law, Carson said, is one reason he supports the Second Amendment and individual gun rights.
“I used to think they needed to be registered, but if you register them they just come and find you and take your guns,” he said. “If we were only concerned about external forces, then we would be okay. But there are some pretty sinister internal forces [in America].”
How Carson Thinks Putin Could Destroy the US Economy
Carson was referring to remarks made by Sergei Glazyev, an advisor to Russian President Vladimir Putin. Glazyev threatened to take steps to get the nations of the world to stop using the US dollar as the reserve currency if the United States leveled sanctions at Russia because of its invasion of Crimea.
“Seventeen and half trillion dollar national debt, think about the implications of that,” Carson told CPAC. “The only reason we can do that is because our currency is the basis of the international reserve currency system and we can print money. If Greece could print money they wouldn’t be in trouble, either.”
The US would not be able to pay off the national debt, which would trigger economic collapse if other major powers stopped using the dollar as the reserve currency, he said. He also He believes the national debt is what makes the US vulnerable to such pressure.
Russia Holds US Bonds
“$17 trillion. Do you know how long it would take to pay that off? [You’d have to pay] $10 million a day for 4,700 years,” Carson said. “That is absolutely absurd. We are killing the next generation.”
Glazyev noted that Russia does hold $138.6 billion in US Treasury bonds, which it could dump on the world market. The national debt is paid off in part by selling treasury bonds.
At least one major economist seems to agree with Carson’s prognosis, although this economist thinks results might be different.
“A world without the dollar would mean faster growth and less debt for the United States, though at the expense of slower growth for parts of the rest of the world, especially Asia,” Michael Pettis told a crowd at Peking University in Beijing, China. Pettis is an economic theorist and financial strategist and a professor of finance.
Why Reserve Currencies Matter
There are observers who believe that the dollar’s days as a reserve currency — the standard currency used in international trade — are numbered.
The average reserve currency lasts for around 40 years, said Mary Callahan Erdoes, the CEO at JP Morgan Asset Management. The dollar has been the reserve currency for nearly 70 years, since the end of World War II. That means its demise as a reserve currency could be overdue.
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