Author of What to Eat When You’re Broke and Bloom Where You’re Planted online course
If you knew that you or your family’s breadwinner was terminally ill and there was absolutely nothing you could do to stop the decline, would you try to prepare? I’m not talking about just getting your mind wrapped around it, although that’s important too. I mean, physical preparations.
- Getting your finances in order.
- Getting urgent tasks completed.
- Figuring out how those left behind would survive when the person was gone.
- Completing important paperwork like wills, adding a loved one to your financial accounts, making sure your spouse was able to speak to the people at utility companies, and appointing someone to have power of attorney.
If your failing health allowed it at all, of course, you would. You’d organize everything to lift some of the burden from the people you were leaving behind.
So if we know that the US Dollar is gasping its last breath, why wouldn’t we do the same and prepare to live without it?
Is the dollar dying?
Read different websites and get different stories. Many prominent financial experts are absolutely convinced that the dollar is gasping its last breaths, including Forbes.
During a three-day state visit, Chinese President Xi Jinping held friendly talks with Russian President Vladimir Putin in a show of unity, as both countries increasingly seek to position themselves as leaders of what they call a “multipolar world order,” one that challenges U.S.-centric alliances and agreements.
Among those agreements is the petrodollar, which has been in place for over 50 years…
…Putin couldn’t have been more explicit. During Xi’s state visit, he named the Chinese yuan as his favored currency to conduct trade in…
…other major OPEC nations and BRICS members (Brazil, Russia, India, China and South Africa) are either accepting yuan already or strongly considering it. Russia, Iran and Venezuela account for about 40% of the world’s proven oilfields, and the three sell their oil in exchange for yuan. Turkey, Argentina, Indonesia and heavyweight oil producer Saudi Arabia have all applied for admittance into BRICS, while Egypt became a new member this week.
What this suggests is that the yuan’s role as a reserve currency will continue to strengthen, signifying a broader shift in the global power balance and potentially giving China a bigger hand with which to shape economic policies that affect us all.
Forbes says that the US dollar is still the world’s reserve currency. For now. But to lose that status would be utterly devastating to our already shaky economy. If the world no longer trades in petrodollars, then the dollar is no longer the world’s reserve currency.
At the same time, other experts have pooh-poohed the idea that the petrodollar might be no more and the petroyuan was ready to jump into its place. Writers from both Barron’s and Bloomberg are confident that the petroyuan is a myth.
You should certainly do your own research about this topic, but the fact that other countries are ready to ditch the dollar is very concerning. This makes tangible assets like gold and silver among the only safe options to hold wealth.
How would it affect us if the USD is no longer the world’s reserve currency?
First, let’s talk about what it means to be the world’s reserve currency. The Council on Foreign Relations explains the importance of being in this position.
A reserve currency is a foreign currency that a central bank or treasury holds as part of its country’s formal foreign exchange reserves. Countries hold reserves for a number of reasons, including to weather economic shocks, pay for imports, service debts, and moderate the value of its own currency. Many countries cannot borrow money or pay for foreign goods in their own currencies—since much of international trade is done in dollars—and therefore need to hold reserves to ensure a steady supply of imports during a crisis and assure creditors that debt payments denominated in foreign currency can be made.
Most countries want to hold their reserves in a currency with large and open financial markets, since they want to be sure that they can access their reserves in a moment of need. Central banks often hold currency in the form of government bonds, such as U.S. Treasuries. The U.S. Treasury market remains by far the world’s largest and most liquid—the easiest to buy into and sell out of—bond market.
The International Monetary Fund (IMF), the body responsible for monitoring the international monetary system, recognizes eight major reserve currencies: the Australian dollar, the British pound sterling, the Canadian dollar, the Chinese renminbi, the euro, the Japanese yen, the Swiss franc, and the U.S. dollar. The U.S. dollar is by far the most commonly held reserve currency, making up more than 60 percent of global foreign exchange reserves.
Simply put, our status means we can use and exchange our money anywhere in the world, so other countries use it too when engaging in international trade.
What happens if we lose our reserve status?
In short, it would be absolutely catastrophic if other countries began trading in oil using other countries’ currencies, causing us to lose our reserve status.
The following events could rapidly occur:
Loss of our ability to trade with foreign countries in our own currency
This means whatever value is assigned to the US dollar by the new reserve currency would be far lower than it is right now. This could render the US dollar basically worthless, as it is no longer tied to the gold standard and has nothing to back it but promises.
This would make everything we import far, far more expensive. In a simplified example, if what is now a dollar became internationally worth 20 cents, we’d see that reflected in the prices that consumers pay for everything we import. Think about how this would affect the availability and cost of necessities like automotive parts, medications, and medical equipment. It’s staggering.
Other countries could potentially call in our debts as they come do.
We owe craptons of money to other countries. Investopedia reports on the top nations that own our debt:
- Japan: $1.2 trillion—4% of total U.S. debt
- China: $980.8 billion of U.S. Treasurys—3.2% of the total U.S. debt
- The U.K.: $634 billion
- Switzerland: $294.1 billion
- The Cayman Islands: $293.2 billion
It’s some consolation that the debt is configured in a way that it cannot all be called in immediately. The debt is held in US Treasuries that mature at different times. But countries could call in the debts as they come due, demanding payment in full instead of extending their investments in US Treasuries.
We could default on our debt payments.
Another concern would be our inability to make payments on our debts. Anyone who’s ever gotten in over their heads financially knows what that means to everyday humans, but how would it affect a whole nation? According to Thomson Reuters:
In the medium- to long-term there would be a global recession and higher costs of doing business for everyone involved. Without a dominant global trade regime, trading blocs will vie for supremacy, perhaps erecting barriers to trade such as requiring business to be done solely in the bloc’s currency of choice, be it the euro or yuan. Money will be tight, and importers and exporters will face delays or maybe even find their jobs impossible for long stretches of time until the new global market dynamic has a chance to emerge.
Despite rising labor costs in countries such as China, the economic disruption may further hamper movement of manufacturing to lower-cost developing countries, further pushing up costs and hampering global economic growth. Yet, out of everyone impacted, the U.S. will be the one left the most scarred. Thrown into a deep recession, its financial system and credit facing the greatest challenge since not 2008, but rather 1929, the prosperous United States at the center of a global economy will become a memory.
Not only would it have physical financial effects, but it would also breach the trust that has allowed us to freely trade with other nations. This would put us in an unaccustomed position of being the one to need aid, rather than the one to give aid. Talk about upturning the global power dynamic.
How do we prepare for this?
As scary as all of this sounds, getting ready for the possibility isn’t that different from other types of prepping. It’s still an economic collapse, and by breaking it down into those parts, it’s far less overwhelming to think about how we’d get through it.
In the interest of not making this incredibly long, I’ll include some links below with my explanations so that you can find more resources.
Stock up in general.
First things first, make sure you are stocking up as much as you can. Food, day-to-day essentials, and items for making your things last as long as possible are important.
Build a pantry.
Not only will prices go up even further, but food you’re accustomed to eating may be difficult to find.
Your pantry should be made up of the things your family already eats and enjoys. While emergency food buckets do play a part in getting prepped, it’s less expensive, more nutritious, and much more affordable to get supplies from the grocery store and outlet stores.
- Here’s a list of strategies for building a pantry
- Here’s a healthy food list
- Go here to grab my course
- Go here to grab my book
Stock up on medications.
If you or a loved one uses a vital medication, you may have already seen that some of these are getting difficult to come by. You should do your best to stock up on your prescription meds. By putting back a supply for a few months, you might be able to ride out the worst part of the storm.
However, you have to be aware that most of our medications are made in China. This could lead to meds becoming very expensive (well, more expensive – they’re already outrageous) or even impossible to acquire.
Begin researching now to learn about substitute medications. Sometimes multiple medications can take the place of one and by doing this research yourself and presenting it to your doctor, you could be offering some valuable suggestions.
Next, learn about alternative medications. I find the book Prepper’s Natural Medicine to be a fantastic place to start.
Look into what essential items are made in China.
This is not to say that China is absolutely the bad guy in all this. (Although they could be, but that’s beyond the scope of this article.) However, we import. So. Much. Stuff. From. China. If ever that relationship were to fall apart we’d have difficulty repairing our vehicles, repairing our heating and cooling systems, repairing or replacing electronics, and finding components for all manner of things that have become necessary in modern life.
These articles were written during the supply chain crisis due to the pandemic. They can help you to figure out some things that you may want to purchase now while they’re easily accessible.
- Here’s a list of some medical items that are made in China.
- Here are day-to-day supplies that became difficult to acquire when shipments were halted from China during Covid.
- Here are some electronics and components that could become difficult to acquire.
- Here are some of the general supply chain concerns we saw.
Determine the best financial strategy for you.
First, let’s look at the micro-effects on individuals. Here are some of the things we could expect if the USD lost reserve status.
- Value: It could lead to a shift in exchange rates between different currencies. Individuals who hold USD-denominated assets, such as savings accounts, stocks, or bonds, could see the value of their investments decline if the USD were to depreciate relative to other currencies.
- Decreased purchasing power: If the USD loses its reserve currency status, it could lead to a decline in the value of the dollar relative to other currencies. This would reduce the purchasing power of individuals who earn their income in USD and could increase the cost of imported goods.
- Higher interest rates: As the demand for US Treasury bonds decreases, the US government may have to offer higher interest rates to attract investors to buy its debt. This could result in higher borrowing costs for businesses and individuals in the United States, as well as slower economic growth. It would make it more difficult to buy and sell homes and cars, just to name a couple of issues.
- Increased inflation: If the value of the USD declines significantly, it could lead to higher inflation as the cost of imported goods and raw materials increases. This could make it more expensive for individuals to purchase essential goods and services.
- Economic Instability: The loss of reserve status could also lead to economic instability and uncertainty, which could affect personal bank accounts through stock market volatility and increased risk of recession or job loss.
As for money specifically, your strategy will differ based on how much money you have. If this occurs, whatever you have in the bank will plummet in value almost immediately. It sounds simplistic, but it’s accurate: the more money you have, the more you’ll lose. If you are living paycheck to paycheck, this will still affect you – don’t get me wrong. But if you have a savings account or investments on which you are relying, you might end up seeing at least some of it vaporize.
If you don’t have savings
If you don’t have savings put aside, then your focus should be on the steps above. Put the material things into place to help yourself survive for the long haul while our national economy shifts and recreates itself. It’ll look a lot different than it does now, but it’s impossible for there to be NO economy as long as there are consumers and producers.
By delaying the need to go out and engage in trade, you’ve bought yourself some time to understand this new economy, and you are also able to provide for the basic needs of your family.
If you do have savings
This changes some if you have savings and investments. First, let me clarify – for the purposes of this discussion, “savings” doesn’t mean some massive fund that you could live off for the next ten years without working. I am using it to refer to the money you have put back, whether it’s cash in a safe in your home or the balance in your bank account.
It doesn’t have to be a lot of money for you to want to take steps to protect it. Always, always get your material things in order before you start diving into protecting your wealth.
I don’t have tons of money put back, but I want to protect it. That’s why I put any excess into physical gold and silver. These will always hold their value. When we’re on the other side of the financial collapse – and there’s always the other side, even if it feels like it’s a disaster that will last forever – then we have a unit of currency that will be valuable no matter whether the dollar is back on top or some other kind of money is king.
If this is a strategy that sounds interesting to you, don’t take it from me. Contact the company I trust for precious metals. You can reach out to ITM Trading and set up a phone call with someone who can walk you through creating your own strategy based on your personal situation. Go here to make the appointment. It’s absolutely free, and even if you decide it’s not for you, you’ll learn a lot. There are no high-pressure sales, and it’s extremely educational.
Again – this is a step you take once you feel you have covered the bases with your physical preparations. You can’t eat precious metals, and you may not even want to use them as a unit of barter. Ideally, you will hold onto it throughout the hard times because if you use it when times are difficult, you will probably only get a small fraction of its value. Once things begin to level out, the money you’ve held in metals can be exchanged as needed, and you will be in a far better position than those who are diving into the new economy without any nest egg.
Why gold?
There are two reasons I suggest gold for holding at least a portion of your savings.
First, the value of gold tends to increase when the value of a currency decreases, as investors seek out alternative stores of value. This means that if the USD were to lose its reserve currency status and its value were to decline, the value of gold could potentially increase.
Secondly, if the global financial system were to undergo significant changes as a result of the USD losing its reserve currency status, this could lead to increased economic uncertainty and volatility. During times of economic uncertainty, gold is often seen as a safe haven asset that can help protect an investor’s portfolio from market downturns.
You need to take steps now.
We’ve already watched banks fail, massive inflation, and supply chain issues. One of these days, we’re going to reach the point of no return with our economy, and I believe that day is fairly close.
You don’t want to face that point with regrets about what you should have done. Get your material preps in order and decide how you will protect your assets.
You know that feeling when a bad storm hits and you’re able to ride it out with only minor inconveniences because you had been prepping for the possibility? The satisfaction and comfort? The feeling that while things may have been somewhat tense, you did what you needed to do and it paid off? That’s what we’re shooting for here. There are no preps that will make this painless but there are plenty of things you can do to mitigate your risks.
What are your thoughts?
Do you believe the USD is going to lose its petrodollar status? Are you concerned that the dollar as we know it is dying? Or do you think the threat is overblown? How are you preparing for the economy to worsen?
Let’s talk about it in the comments section.
About Daisy
Daisy Luther is a coffee-swigging, adventure-seeking, globe-trotting blogger. She is the founder and publisher of three websites. 1) The Organic Prepper, which is about current events, preparedness, self-reliance, and the pursuit of liberty; 2) The Frugalite, a website with thrifty tips and solutions to help people get a handle on their personal finances without feeling deprived; and 3) PreppersDailyNews.com, an aggregate site where you can find links to all the most important news for those who wish to be prepared. Her work is widely republished across alternative media and she has appeared in many interviews.
Daisy is the best-selling author of 5 traditionally published books, 12 self-published books, and runs a small digital publishing company with PDF guides, printables, and courses at SelfRelianceand Survival.com You can find her on Facebook, Pinterest, Gab, MeWe, Parler, Instagram, and Twitter.
The dollar is declining, so is the empire. But it will take ages for this process to complete. There’s no substitute in sight, who’s going to accept a shady yuan, a broken euro or yen, a weak rand or ruble, an unknown real? No one will.
Everyone wants dollars, even the governments and elites of the BRICS. The current problem is precisely the lack of dollars in the market, the lack of liquidity and credit. No one’s complaining euros are missing, or the rates in BRL are almost 14%/yr who gives a sh*t.
Then there’s the issue of the pipes, the banking and payment systems. There are new systems being built but the whole infrastructure takes decades to complete, get tested, become reliable and usable and then some more to be accepted. And that if every player tags along, which I don’t see happening now.
Sure technology and a black swan or two can fast track all that, and probably will. But still when it comes to human psychology for acceptance and change things aren’t as straightforward or swift. Tech doesn’t make much difference for that. When something breaks everyone dash to safety first, it’s a reflex. Fear and greed, always.
Everybody wants to get rid of the dollar because the US is the strong bully and has been abusing its power? Yes, but it’s been like that for at least a half century or more. Can’t please everyone, it’s a tradeoff. Everybody’s always complaining but whenever something happens they run to call for the Uncle Sam to intervene.
No one can replace the U.S. or the dollar, it’s more wishful thinking because in practice it’s a lot more complex than just take a decision to trade in rubles, rands, yuans or reals or whatever. They just can’t enforce it, only the US can.
The US has 750 foreign military bases in 80 countries. Terrorists, pirates, invaders, a meteor coming from space? Who’s taking action, China? The UK? Russia? I don’t see it. Call the bully, but please let’s start trading in local currency because those ugly SWIFT sanctions are causing much pain to populations in Russia, Iran or even Europe. The hypocrisy.
Finally, what it really means to be an hegemonic superpower? Exporting the bad (pollution and devastation of natural resources, inflation, long working journeys, poverty and inequality) and keeping the good (stability, welfare, the middle class, high standard of living, material abundance, quality of life).
At the bottom, that’s what everyone is after and it’s always at the expense of others, there’s no way around it that’s the history or humankind. Even if that comes with a hefty price tag even to Americans – unplayable debt weighing on future generations and all – does anyone think the US will give up all that willingly and peacefully? I don’t think so.
That said… yes, there will be turmoil and pain ahead. The crossing is always turbulent. There’s no free lunch: the price of sustaining the USD the GRC and the US status as the leading superpower will be accelerated Thirdworldization in the U.S.: inflation, degradation and decadence, geopolitical friction, supply chain turmoil, social unrest and violence, and more. Prepare for that and forget the rest.
Excellent Assessment! Very well stated.
You left out the Ridiculous Rupee. If people sell things for Rupees, WHAT would people want to buy with those Rupees? Actually, a lot of medicine is made in India, and there is food, and leather products. A lot of auto interiors are made in India. I don’t know how much heavy equipment and electronics are made there. I was there 5 times… 30 years ago… the place was a mess.
Fabian,
Respectfully, I have to disagree with you on a few points.
The way Russia was able to pivot to a gold and commodities backed currency is what I think will replace the dollar.
As for running to Uncle Sam, I think those days are coming to an end. The empire is collapsing. Everyone sees it. From our politics. The recent (past decade) progressive movement that is destroying our society. Our debt. Our military is having problems recruiting young people so much so the Air Force just raised the weight standards, again.
Various countries are now willing to trade in other currencies than the dollar. At one time, the US would send in the military and change their minds for them. Not any more. Even our so-called allies like SA, are doing it. OPEC+ just gave the US the middle finger with their cut on oil production going into effect in May and is to last till the end of the year. Everyone is positioning themselves to not get the mess on them when the US really goes kersplat.
It might still be a few years off. Or it could be this year with the recession. But it is happening.
Thanks 1StMarine.
No doubt the empire is falling, it was the first thing I said in my comment. It´s just that it will take a lot more than desire for that to happen.
I´d argue that China doesn´t want that to happen. Much less the Saudi, or Russia. Which BTW isn´t really an expansionist nation. They were the Iron Curtain, not the Iron Stage. They want local power and some global influence but that´s it because, well, Russia is used to being relatively independent and isolated.
They also have already learned the lesson that America is finally starting to lear, which is the price of privilege can become too high. Everybody wants the good that comes with being the global or even a local superpower, but at one point this turns into a burden. I could be wrong but suspect China feels the same.
The US still has the printing press and that´s no small thing. I has the desire to maintain that status, at least for now. It may be that if the USA goes to war, say a direct conflict with China or whatever, then some of its underlying weaknesses become evident. We don´t know, and won´t for sure until something happens.
Until then, it´s more speculation and wishful thinking and negative bias than anything else. I know falling from grace feels awful but it´s not as bad as it´s looking (or feeling) for Americans, and not as easy and smooth as it looks from outside. Anyway, that´s my opinion.
Falling from grace?
Dunno if I would go that far.
If anything, I think a kersplat should of happened at least a decade ago. Tear the band aid off fast, and get to re-build and recovery that much faster.
Now we have gotten to the point where the pain is going to be not only greater, but longer.
We also have a problem with one half of the country hating the other half and vice versa.
Was talking with a friend the other day and his sentiment is this country is not worth fighting for anymore.
I’m between 1stMarineJarHead and Fabian. I respect both your viewpoints, so let me share something to consider.
The petrodollar doesn’t have to die (or get permanently replaced) for an economic disaster to hit the US. The dollar would be weakened if other nations trade in their own currency, reducing demand for US dollars. The value of the dollar would drop.
One older economics book (can’t recall which, it’s around here somewhere) explained it this way: If the US has a trade imbalance where we purchase (import) more than we sell (export) like with China and most of the world, the nation we’re buying from would end up with a surplus of dollars. Currently, other nations can use those dollars to buy oil, or to buy any other commodity (like wheat) from any nation that also uses dollars to buy oil. So they don’t end up with a surplus, becuase they can trade in dollars. This keeps the dollar in circulation and in demand.
If other nations start trading in their own currencies, the demand for the US dollar drops. When the supply of dollars is high (and increasing) but the demand drops, the “price” or value of the dollar drops.
Even if China, Russia, India, and other major nations COULD keep using dollars, they might no longer need to. Establishing the option to use their own currencies creates an opportunity to seriously damage the US economy, since they could simply stop using dollars (and/or stop accepting them).
Now, China would not want to significantly damage their own economy; with so many exports to the US, China probably can’t simply stop using dollars. But they can hurt us a lot more than they hurt themselves. And they would accept some economic pain if, for example, if we try to stop them from taking Taiwan.
So the BRICS+ nations don’t necessarily need to replace the petrodollar. They only need to create a situation where they can stop (or temporarily suspend) their trade in dollars. What would happen, for instance, if those major nations halted using dollars for just a few months?
The US has frequently flexed it’s economic muscle to punish other nations, often ticking off nations that were not directly affected (India was not happy about our sanctions on Russia and attempts to damage the Russian economy). Those nations may soon have the same ability to damage the US in the same way.
Dagr,
Great comment!
While Daisy’s article focuses on mostly global geopolitical aspect and the ramifications of the dollar losing it’s global reserve currency status, we have a whole lot of problems domestically only adding to the issue.
Per Selco’s advice, be aware or informed of the big circles. Affect the smaller ones that you can.
Thanks! There’s too much going on to mention it all. My other concern is interest on the debt. Media and government (but I repeat myself) often describe it as a percent of the budget. But the percentage of revenue is more relevant. That interest is approaching one trillion per year, on about 5 trillion of tax revenue. Paying 20% of revenue on interest is absurd, and that percentage is climbing. And with a recession coming, tax revenue will decrease (and “bail out” spending will increase).
Imagine having a $50,000 income, but with over $300,000 in credit card debt on which you pay $10,000 in interest (and never pay down). Instead, you add another 10 to 15 every year on the card. And your interest rate is climbing rapidly. And you’re about to get a pay cut. But you (as a brilliant politician) figure, we’ll just borrow 20 or 25 thousand per year!
At some point, the interest owed will exceed the revenue, and you’re bankrupt. In reality, you’re lost long before that happens, because no one will accept your money. Other nations see this, so they’re “prepping” for a devalued dollar.
The most likely ways out are to immediately cut at least one-quarter of federal spending (good luck!) or keep spending and just print money and further devalue the currency (like every other nation did, leading to massive inflation). I’m oversimplifying, I know. But intentionally devaluing the dollar will cause other nations to move away from it, further driving down the value.
So, we’re lost. Oddly, I don’t see this happening quickly, like next year. It may be several or many years, as Fabian said. Our government is good at hiding problems and CYA, coming up with gimmicks to paint a rosy picture. And it helps that most people don’t want to see it. But the reality and the math are inevitable.
All excellent points, Dagr. However, no one knows what happens when the GRC collapses, because it hasn´t happened before, like ever.
The US may go the way of Zimbabwe, but I don´t think so not with the US military and might. Other than devaluing the currency and balloning the debt, everything else is different. Argentina can´t fire the printing press, the US can.
“But intentionally devaluing the dollar will cause other nations to move away from it, further driving down the value.”
True, but currencies are relative, to one another and also to goods and assets. Other nations are also printing and going down the fiscal largesse, not just the US so that´s one dirty laundry indeed.
I live in Brazil and the BRL would go to zero long before the USD goes down. In other words, I´d take as many USD as I can, and you guys are willing to part with, anytime (lol). Look at what´s happening in Argentina right now, as we speak. I mean today.
But yes, the USD can go to the moon relative to the BRL or other currencies, and still go down relative to gold, or worse, to US denominated expenses, goods and services, which would be bad for Americans of course.
“So the BRICS+ nations don’t necessarily need to replace the petrodollar. They only need to create a situation where they can stop (or temporarily suspend) their trade in dollars. What would happen, for instance, if those major nations halted using dollars for just a few months?”
The point Dagr, it´s much easier said than done. Put that way it sounds simple, but the system backing that up, the entire infrastructure behind it… I mean, it´s just so complex and has so many parts and interests…
We know only a small fraction and it already makes my brain melt down. Imagine all the powerful players who don´t really want this to happen and know the implications, what they´d be doing to keep this from happening.
Even if all starts aligned and everyone agreed partially about “let´s get away from the dollar in X months” or whatever, it would be such a mess to actualy make it happen. And I bet they´d run with their tails between their legs on the first hicup, which I would imagine would be plentyful.
The USD may become a smaller part of the GRC basket along the euro, yen, UK pound, Swiss franc and whatnot, maybe the yuan or other currency makes into the basket too or the whole balance changes. That´s already happening, but may reverse as well – it´s a matter for the markets, not politicians and bureaucrats.
It´s hard to envision the USD going lower than 40% in that basket, or how. Of course that already means a lot of trouble for the US and also the rest of the world, probably a war on the way, but as bad as it looks it´s better than the alternative. Again, just my opinion.
Fabian, wise comments! There’s so much we don’t or even can’t know.
I don’t anticipate a total collapse of the US economy or the dollar, at least not in my lifetime. Others here may disagree, or think I’m foolish. But if the US dollar goes down, most of the world’s economies would go with it, and no nation wants that to happen. Still, I am certain the dollar will lose value. Perhaps that would be mitigated by devaluing of other nations’ currencies.
My concern is less about a collapse, and more about what the government will do once they see it happening. A long-term strategy would be required, but our leaders do not think beyond the next election cycle, and short-term fixes usually make things worse in the long term by kicking the can down the road. The problem is delayed, but grows larger.
Good point that suspending international trade in dollars is much easier said than done. Still, I see an opportunity for other nations to put an economic squeeze on the US, and that isn’t something that’s ever happened before. I don’t know what it would look like or how it would be implemented, but that’s why the idea is scary. Even a week or two of pressure could disrupt supply chains and throw our markets in turmoil. So, I don’t anticipate a collapse, but I do foresee hardships like the Great Depression. And if even that doesn’t happen, my preps won’t be wasted!
The looming disaster is a lot bigger than just the petrodollar status loss. No fiat money system in history has ever been able to survive its government’s insatiable appetite for spending for welfare, warfare, elitefare, etc. In just the last couple of years the US Federal Reserve has counterfeited more US dollars than in all of the previous two and a half centuries. Ever since secret British money bought the 1912 election for their favorite socialist Woodrow Wilson, the US has institutionalized dollar counterfeiting that was once a death penalty offense when mere individuals committed such a crime.
No government-controlled “public school system dares to teach that counterfeiting money is blatant theft of the purchasing power that was supposed to be protected by the dollars you earned, inherited, were gifted, etc. That purchasing power is then stolen by “friends” of the Fed who receive such fraudulent money and get to spend it to acquire valuable assets BEFORE the ripple of price increases takes effect across the country. Austrian economics call that transfer of wealth the Cantillon Effect.
Today the Biden crime family is pushing hard for making US dollars worthless and for replacing them with all-digital electric money that can be turned on or off by government, that will control what you are allowed to buy or sell, where or if you are allowed to travel, and what medications (no matter how deadly) you might be forced to accept. The Trump administration had created a federal initiative to investigate how to prep for and defend against cyber attacks which could shut down all three of the US power grids (East, West and Texas) — after which the Biden takeover killed that initiative immediately.
A couple of years ago the globalists ran a simulation called Cyber Polygon to explore what would happen during and after a nationwide power shutdown. Whether we take such exercises seriously should be viewed in light of the simular simulation in the fall of 2019 about a nationwide pandemic — after which in just a few months Covid-19 was turned loose on us.
So with the uncontrolled spending by the Biden government, the prospect of hyperinflation to destroy the money (think Weimar, Zimbabwe, Venezuela, et al), plus the possibility of a cyber attack from an untraceable source that could shut down all three US power grids for years (taking all that now-digital money with it), it would leave the population with barter and foreign currency that might not have converted to electric digital money. Even crypto currencies (which need a working internet) would be unusable. History tells us that when money was unavailable … money substitutes such as grains, salt, alcohol, chocolate, precious metals, etc have all been used to facilitate the division of labor to keep an economy functioning for survival. Some people can survive with such fallbacks but many will starve.
So the war on the petro-dollar is strongly self-inflicted by our government of thieves — after which a financial collapse will attract the world’s largest investment funds (Blackrock, Vanguard, etc) that will swoop in to steal much valuable property for a song — as was done in the 1920s when Weimar collapsed after the destruction of their money.
So squirreling away your paper US dollars under your mattress will guarantee the federal counterfeiters will steal all of that purchasing power that you had honestly accumulated … and counted on.
–Lewis
Another excellent assessment! Thank you.
As far as simulations, wasn’t a disaster drill run in NYC the day before, or, the morning of, the 9/11 attacks?
Just read an article the dollar went from 73% in reserve global holdings in 2001, to 55% in 2021. And last year, it dropped to 47%. More than a few economists noted the sanctions against Russia over the Ukraine invasion, backfired. That is what is leading to the end of the US/West lead uni-polar world to a multi-polar world. It likely would of happened anyways, but that move just accelerated it that much faster. I did not think I would see it in my life time. Now we are watching it unfold before our very eyes.
We are planning on cashing in part of the 401k to pay off the house. The one other big investment we are considering is trading in the truck for a new, diesel one. The new one would get the whole under spray, rust proofing, maybe even the paint protection. This would be the last vehicle we would ever purchase.
Otherwise, expand the gardens, new chicks to replace the aging hens, and the usual preps.
Daisy, ya got me seriously considering PMs.
Non-prepping Americans hav no idea what pm’s are or their worth. Mark Dice made a video of himself standing 2 or 3 storefronts down from a coin shop complimenting people on their ice cream, a shirt, a tool set worth a few hundred $, etc. Then he offered to give them a one ounce gold coin worth $1800 at the time for the item he had complimented. All refused, thinking what they had was worth more. One fellow said the coin was foreign money.
Selco said he traded two gold chains worth about $1000 in normal times for two cans of food.
The first pm’s to get are “junk silver,” old dimes and quarters, etc. Americans recognise those and know they are what they claim to be. In a money collapse, they will soon become able to think with those, and you can get a local economy going.
US dollars are like Epstein Island and DC pizza parlor virgins – after they’re cycled through the system enough times their value drops to zero and are only good for land fill. But we have an endless supply coming over the border, so no worries, as long as the karma doesn’t catch up with you…/s
True, but that´s also true for every other currency.
1st Marine, I understand why you want a new vehicle but most vehicles are very trackable now and do you want that. Google and a few other tracking companies are now pairing with car makers to install their tracking stuff in vehicles. My husband has a 2014 truck that even tho he does not have onstar, it still tracks him and every time he pulls up to the garage, it shows a hotspot in his truck.
I got a friend who is a cyber security expert and knows a lot about cars. His dad used to race them.
Are you concerned that the dollar as we know it is dying? Yes, and we should ensure that we are “spiritually prepped” with Jesus to persevere through the difficult days ahead. Godspeed to all.
My only concern is, what are they going to do to the Chinese and you E that will cause your currencies to collapse as well.
The first preps you are already doing: skills and supplies. Homesteading and gardening.
But we do need other people. Junk silver and other barterables can help kickstart a local economy. Get to know your neighbors.
The old USA is far too corrupt to save–but we can create a New USA, with the original Constitution and much more LOCAL emphasis. Go beyond your own little self/family and start fixing this. Investigate CSPOA Constitutional Sheriffs and Peace Officers Association and SUPPORT them. Support other local groups. Buy from local mom and pop stores of all kinds, even if it costs more.
Support American manufacturing, especially local. Pay twice as much attention to county and smaller politics than you do to state and Federal.
Thank you for this article! With regards to funds – I’m struggling to make the best decision given the financial situation this country is in. My husband and I have been saving for years to buy some land away from people where we can build a homestead. Because of the craziness that is the housing market, we’ve been holding off. My question is – would it be better to use the money we saved to pay off our mortgage and be 100% debt free (we live on 1/3 an acre in a neighborhood), or take out a mortgage that’s hundreds of thousands of dollars but have land and be away from people?
Any advice you could give is appreciated. Thank you!
Daisy your TOP forum is looking abandoned and is getting overrun with spam and unrelated content. It looks like a prime candidate for abuse by nefarious actors, you may want to shut it down if it’s not serving a useful purpose.
thank you for letting me know! Will do!
US$ as petro$$ is already done as Saudi Arabia is already aligned with BRICS. The BRICS (mainly China & Russia) are considering a 30-40% gold backed basket ?with the remainder non U.S. major currencies.
So US will go from primary world reserve to ? fractional reserve as we’re becoming a Banana Republic or worse follow the Weimar Republic footsteps (1920’s) & then on the ‘Road to Serfdom’ a classic work by Nobel Laureate (1974) F. Hayek a pioneer in monetary policy. His thesis, Collectivism Is Not Democratic! Sad but the US population will suffer greatly if not already there, but hopefully we don’t become a modern day Zimbabwe/Venezuela. But Americans Need to Wake Up Sooner rather than Later. The walls are already closing in!