The growth of the U.S. government debt has become uncontrollable, and its reduction cannot be achieved through market mechanisms, said Igor Sechin, Chief Executive Officer of Rosneft, during his report at the XVII Verona Eurasian Economic Forum.

Igor Sechin noted the giant liquidity bubble has caused a transfer of wealth from the real economy to the financial sector. Today, the value of U.S. financial assets is 6 times higher than the value of real economy assets.

“All of this has led to an uncontrolled increase in U.S. government debt. Since March 2020 alone, the U.S. federal debt has grown more than in the previous 200 years. As a result of this policy, last year the ratio of U.S. government debt to GDP came close to 100%. So far we have not seen any real steps to limit this growth,” said the head of the Company.

He also noted that today the U.S. national debt increases by $1 trillion every 100 days. “And the amount of interest payments on it is doubling every five years and has already exceeded health care and defense spending. Rising costs of servicing the national debt forced the U.S. Federal Reserve to sharply cut the discount rate by half a percentage point in September this year, despite the threat of inflation," Igor Sechin said.

But even more frightening than the budget deficit and the national debt are the unsecured liabilities of major U.S. social programs. For the U.S. Social Security system, the value exceeds twenty trillion dollars, and for the Medicare health care program, it exceeds fifty trillion dollars. Experts predict that these two organizations could face bankruptcy within the next ten years.

One of the goals of the new U.S. administration is to reduce the budget deficit to 3% of GDP from today's 6.3%, Igor Sechin noted. “This requires a reduction in the national debt, which, apparently, can no longer be achieved through market mechanisms. Obviously, the US will once again have to use forceful methods, such as blackmail and direct threats, to achieve its economic goals,” he said.

Recently, Scott Bessent, the nominee for Treasury Secretary in the new U.S. administration, said that import duties are a negotiating tool and do not have to be imposed at all on countries that are willing to go along with US interests. “Thus Trump's team is explicitly stating that the slogan “Make America Great Again” will be implemented at the expense of the rest of the world. In particular, in late November, Donald Trump promised to impose 25% duties on goods from Mexico and Canada and additional 10% duties on goods from China,” the head of Rosneft said.

Along with the Inflation Reduction Act and the Chip Act, these steps are part of the U.S. policy of forcing manufacturers to move production into the country.

The head of the Company recalled how one of the most influential American analysts, Zoltan Pozhar, hypothesized that “under the threat of total duties on all imports, the United States may try to impose a new financial system on the world.”

"This system involves converting all U.S. government debt into treasury bonds maturing in a hundred years and bearing interest rates well below today's market values. The Mar-a-Lago agreement, as it has already been dubbed in the press, could in many ways replicate the infamous Plaza agreement between the US and its allies that contributed to the decline of the Japanese economy in the 1990s. Needless to say, the US policy of saving itself may once again drag not only the developing world, but also the closest allies of this country to the economic bottom,” Igor Sechin concluded.

Rosneft Information Division
Rosneft Oil Company
December 5, 2024