The US dollar is backed by nothing and its fall will drag down the rest of the world, El Salvador’s Nayib Bukele has declared
Nayib Bukele speaks during the Conservative Political Action Conference in Oxon Hill, Maryland, February 22, 2024 © AP / Jose Luis Magana
The US economy is based on the “farce” of printing unlimited amounts of money, and Western civilization will collapse when that bubble “inevitably bursts,” Salvadoran President Nayib Bukele warned American conservatives on Thursday.
Fresh from winning a second term in office with 84% of the vote, Bukele arrived at the Conservative Political Action Conference (CPAC) in Maryland to a hero’s welcome. Hailed by American right-wingers for his adoption of Bitcoin as legal tender and his iron-fisted crackdown on gang crime, Bukele closed his speech with a call for massive structural changes to the US economy.
Conservatives, he said, “always tell me that the problem is high taxes, but they are wrong.”
“The real problem is that you pay high taxes only to uphold the illusion that you are funding the government, which you are not,” he claimed, before describing how the government is financed by Treasury bonds, which are purchased by the Federal Reserve with printed money backed by the bonds themselves.
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“The government is funded by money printing, paper backed by paper. A bubble that will inevitably burst,” he said, adding that “the situation is even worse than it seems, because if most Americans and the rest of the world were to become aware of this farce, confidence in your currency would be lost. The dollar will fall, and Western civilization with it.”
“If the next president of the US does not make the necessary policies and structural changes, sooner or later that bubble will burst,” he concluded. “It will take a total re-engineering of the government from top to bottom.”
Gold backing of the dollar was removed in 1971 when President Richard Nixon reneged on the Bretton Woods system set up after World War II that provided for convertibility of the dollar into gold at a fixed rate. The US’ national debt has since exploded, soaring from $232 billion in 1971 to $34 trillion at the beginning of this year.
Republican lawmakers and the White House agreed last June to temporarily lift the nation’s debt ceiling, postponing what would otherwise have been a cataclysmic default. The agreement will last until 2025 when it will likely be renewed.
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Bukele is best known for reducing El Salvador’s homicide rate from 38 per 100,000 when he was elected in 2019 to 2.4 at the end of last year. He achieved this feat by declaring a state of emergency in 2022 and jailing more than 75,000 suspected gang members, a crackdown that was harshly condemned by liberal NGOs and human rights organizations.
“The people of El Salvador have woken up, and so can you,” he told the crowd at CPAC. Pointing to rising crime and drug use on the streets of American cities, he called on conservatives to “put up a fight because in the end it will be worth it. You will have your country back.”
