A new monetary system might be here sooner than we think:
A new monetary system might be here sooner than we think.
America has held its power over the world with its currency since the Bretton Woods system was created in 1944.
They can use their dollar to enforce sanctions on countries and take them out of banking systems.
It’s what they did with Russia.
How do other countries feel if America decides one day that they want to take them out of the banking system?
China and Russia know the dollar will collapse at some point.
We might be closer to the end of America’s supremacy over the world than most people think.
America has way too much debt.
Interest rates are at 0%.
If they hike rates to get inflation under control, they need to hike more than a couple of percent.
Problem is they can’t do that because they can’t service the interest on the debt.
So now they’re blaming other countries for their own monetary policy problems.
Biden’s putting inflation on Putin and Russia.
Obviously, not his own Federal Reserve that has printed trillions of dollars since Covid started.
But if they don’t raise interest rates, inflation gets even more out of control.
That’s disastrous around the world, especially for developing countries.
Revolutions happen over poor economic conditions often due to inflation because most people can’t afford the basic necessities of life.
If people can’t afford to heat their houses and eat, you have problems.
Many countries peg their currencies to the dollar so they’re feeling the inflationary pressure.
Everything is more expensive everywhere.
That’s not only an issue for businesses, but also for countries civility.
This is how protests, riots and revolutions happen.
So the Fed is trapped.
Save their economy or save their currency.
Pick one Jerome Powell.
Either option has a terrible consequence, but you have to make a call.
My bet is they’re going to keep printing until the asset bubble bursts.
But if that happens, they have nothing left in the tank.
They can’t backstop the system to infinity because then the American dollar hyperinflates and other countries’ governments will start dumping US treasuries.
The Fed can keep buying the debt, but for how long before the rest of the world realizes they need a new system.
The next evolution of the world reserve currency is up for debate. Could it be the RMB? Maybe. Could it be gold? Maybe. Could it be a basket of world currencies? Maybe. Could it be bitcoin? No, but nothing is impossible.
Many people around the world could never conceive of a world where the American dollar is not the world’s reserve currency, but we may be sooner to its collapse than people think.
All currencies collapse.
This is how history works and history is undefeated.
The critics will always say ‘it’s different this time’ till it’s not.
A new monetary system might be here sooner than we think.
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