Dear FutureMoneyTrends.com Member,
No fiat currency survives. This is true without exception, so if you believe the dollar will last forever, you will eventually be proven wrong. Spain, Netherlands, France, Britain and the U.S. have at one point in time during the last 5 centuries held the dominant currency; the currency used for trade and as a global medium of exchange.
The U.S. dollar rose up after World War II. As a currency convertible to gold, the dollar became King Dollar. In 1971, the U.S. announced a temporary pause to backing its currency with gold and went to a currency backed by the U.S. government. Today the world, for the first time, uses a medium of exchange that is purely faith-based, with no intrinsic value.
Headlines around the world are proving that the dollar is likely nearing its end. The King Dollar is shrinking as a percentage of the world’s currency supply. China, Russia, Brazil and India are coming out with new agreements almost every week announcing direct trade in their home currencies. More and more countries are willing to use other currencies to do business.
As a percentage of the world’s money supply, the U.S. has plunged from 90% in 1952 down to just 15% today. The road to complete destruction is pretty simple to understand. By having the world reserve currency, the U.S. is allowed to print money to service its debts. But what happens when interest rates rise and the U.S. is spending 40 to 50% of its income just to service the interest on our previous borrowing?
You can see why the FED will say and do anything to keep interest rates low. Bernanke recently said that he doesn’t see interest rates reaching normal levels (6%) again in his lifetime! That’s pretty significant, as Bernanke is only 61 years old. So what he is basically saying is that interest rates will remain low until around 2030 to the early 2040s. That is if everything works out like the FED and U.S. government need them to.
The reality is in Bernanke’s lifetime, the U.S. will lose its reserve status; either to another country or group of nations, or after a major reset of the global monetary system. The black swans, of course, are everywhere. From the U.S. backing its currency with oil to a major war breaking out — to be clear — a dollar collapse will not be a black and white event. The full outcome and how it will play out is impossible to predict.
A dollar collapse is also impossible to time, which is why I think you should be prepared for it now. This is so that when it does happen, it doesn’t catch you by surprise.
Here are some prudent actions you can take to prepare for the collapse of the U.S. dollar:
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- Own some physical hard assets like precious metals.
- Become a landlord; owning my favorite cash flowing hard asset.
- Pay off your home and become completely debt-free.
- Stick with owning the best businesses in the world (see our Forever Stock Suggestions)
- Diversify your cash holdings.
- Avoid the 1980s portfolio model (U.S. mutual funds, bonds, & fixed Dollar denominated investments)
- Prepare your household for the possibility of civil unrest.
There is certainly no reason to dwell on this or become obsessed with it, because we are literally talking about a global event that will change the entire monetary system.
66 countries according to the IMF have either adopted the dollar as legal tender, peg their currency to it or manage their exchange rate against it. This is 33% of the nations of the world all submitting their currency sovereignty to the U.S. Federal Reserve.
When the dollar does collapse, this will be a day that will be remembered for centuries.
For questions regarding any of our articles or videos, please send them to Daniel@FutureMoneyTrends.com.
Weekly Wealth Digest Video Episode 35
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