In this episode, I explain why it is unlikely that the dollar will collapse. I also outline some strategies America must continue to implement to maintain its global economic power.
In this episode, I explain why it is unlikely that the dollar will collapse. I also outline some strategies America must continue to implement to maintain its global economic power.
The collapse of the dollar will mean it will lose all its value. If this happens, investors will no longer do business with the United States, America will pay more to import products, Americans will pay more taxes, and the dollar will no longer be the global reserve currency. Don’t be afraid. Let me tell you why that day has not yet come.
In addition to the five US territories, the dollar is the official currency of eleven other countries worldwide, and 72% of world trade is done in dollars. Moreover, with an annual GDP of $23 trillion exceeding that of China and Japan, which are respectively $ 17.7 trillion and $ 4.9 trillion, the US economy continues to attract global investors looking for a safe currency to trade goods.
Compared to other currencies backed by gold or silver, the dollar’s strength is backed by America’s reputation and weight in global financial markets. Investors are always reluctant to accept and adjust to change. Therefore, it will take time to build trust and faith in any other existing currency, let alone in a new currency, even if many countries would adopt this new currency to make their trade.
For the dollar to fall, the United States would have had to face a series of unfortunate events, such as natural disasters, wars, social unrest, political upheaval, high debt, or uncontrollable inflation. In any of these cases, the dollar can become the casualty. Anyway, I don’t know about you, but I still believe that any of these events is almost impossible to happen. Maybe inflation could happen, but America has a solution for it already.
The dollar, like any other official currency, loses its value due to inflation. The Federal Reserve, America’s central bank, controls the dollar’s volatility through tax adjustments and investment incentives to prevent inflation from becoming hyperinflation. Hyperinflation occurs when prices of goods are galloping continuously or increasing by more than 50% in the same month.
The dollar would lose its global primacy would be if and only if other countries decided to stop using it for international trade. However, the chances of this happening are meager.
If the dollar were to collapse, it would cause significant financial damage to the American economy. To preserve the dollar’s primacy in the global economic sphere, the US government must dominate the global diplomatic narrative to strengthen its foreign policy and counter the influence and rise of China on the global scale.
In summary, currently, the dollar is a global reserve currency, meaning many countries use it for global trade. Economic experts say the dollar is losing value because of the BRICS expansion and China’s rising influence on the world trade market. If the dollar were to collapse or if another global reserve currency entered the financial system, the economic world would be in shambles. This collapse is not near because 72% of world trade is done in dollars and 16 other countries use the dollar as their official currency.
Bobb Rousseau, PhD
Apostrophe Podcast
The collapse of the dollar will mean it will lose all its value. If this happens, investors will no longer do business with the United States, America will pay more to import products, Americans will pay more taxes, and the dollar will no longer be the global reserve currency. Don’t be afraid. Let me tell you why that day has not yet come.
In addition to the five US territories, the dollar is the official currency of eleven other countries worldwide, and 72% of world trade is done in dollars. Moreover, with an annual GDP of $23 trillion exceeding that of China and Japan, which are respectively $ 17.7 trillion and $ 4.9 trillion, the US economy continues to attract global investors looking for a safe currency to trade goods.
Compared to other currencies backed by gold or silver, the dollar’s strength is backed by America’s reputation and weight in global financial markets. Investors are always reluctant to accept and adjust to change. Therefore, it will take time to build trust and faith in any other existing currency, let alone in a new currency, even if many countries would adopt this new currency to make their trade.
For the dollar to fall, the United States would have had to face a series of unfortunate events, such as natural disasters, wars, social unrest, political upheaval, high debt, or uncontrollable inflation. In any of these cases, the dollar can become the casualty. Anyway, I don’t know about you, but I still believe that any of these events is almost impossible to happen. Maybe inflation could happen, but America has a solution for it already.
The dollar, like any other official currency, loses its value due to inflation. The Federal Reserve, America’s central bank, controls the dollar’s volatility through tax adjustments and investment incentives to prevent inflation from becoming hyperinflation. Hyperinflation occurs when prices of goods are galloping continuously or increasing by more than 50% in the same month.
The dollar would lose its global primacy would be if and only if other countries decided to stop using it for international trade. However, the chances of this happening are meager.
If the dollar were to collapse, it would cause significant financial damage to the American economy. To preserve the dollar’s primacy in the global economic sphere, the US government must dominate the global diplomatic narrative to strengthen its foreign policy and counter the influence and rise of China on the global scale.
In summary, currently, the dollar is a global reserve currency, meaning many countries use it for global trade. Economic experts say the dollar is losing value because of the BRICS expansion and China’s rising influence on the world trade market. If the dollar were to collapse or if another global reserve currency entered the financial system, the economic world would be in shambles. This collapse is not near because 72% of world trade is done in dollars and 16 other countries use the dollar as their official currency.
Bobb Rousseau, PhD
Apostrophe Podcast