$Trillion Has Likely Exited US Banking System As America Risks Global Economic Isolation: Former US Treasury Secretary
Former US Treasury Secretary Hank Paulson believes panic in the banking sector is not over, and the first recession since 2007 may be inevitable. In a new interview with the Financial Times, Paulson says depositors appear to have pulled about $1 trillion out of the banking system so far this year.
He says that small and regional banks are now focused on protecting their capital and severely tightening their lending services, which will likely roll the economy over into recession. He predicts traditional forms of borrowing and lending will shift outside of the regulated banking system, which will spark further uncertainty and potential panic.
And amid a bleak economic outlook, Paulson says global economic isolation is now a serious risk for the US. China and a group of economically-aligned countries known collectively as BRICS appear to be mounting an effort to shift the world’s monetary system away from the US dollar.
The group is reportedly preparing to develop an alternative currency that would circumvent the dollar. BRICS stands for the countries of Brazil, Russia, India, China and South Africa. A number of additional nations, including Saudi Arabia, Argentina, Iran, Indonesia, Turkey and Egypt, have reportedly expressed interest in joining the alliance.
