STOP Lying! De-dollarization and What They Don't Tell You

OH NO! It’s the End of the US Dollar! Hold up there chicken little…I’ll prove the dollar is not about to collapse and show you how to invest for the long-term. Do not get scared into changing your investments because some YouTuber is screaming about de-dollarization and the end of the dollar as the world’s reserve currency!

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The trend lately is for videos warning of an imminent crash in the value of the US dollar…and economic calamity to follow. Videos are getting millions of views and everyone is jumping on the bandwagon. Unfortunately for investors, it’s more entertaining than it is good analysis and viewers are jumping into investments that will ultimately lose their money.

That said, the loss of reserve currency status for the US dollar would be a monumental shift and is certainly something you would need to plan for. But let’s look at the facts, what all the drama is about and how to invest around it.

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The dollar became the world’s reserve currency after the Bretton Woods agreement in 1944. It was there that governments agreed to, instead of backing their currencies with massive gold holdings, they would just hold US dollars to stabilize foreign exchange rates. The US dollar was linked to gold so it was thought to be as good as a gold-backed system for other currencies.

It gave the US enormous monetary power, constant demand for dollars meant lower interest rates on government borrowing. It also means better access to capital for US companies with foreign investors always ready to snap up dollar-denominated stocks and bonds. Even when the US stopped backing its currency by gold in 1971, the dollar kept its reserve status.

The big news lately is talks among the BRICs nations; Brazil, Russia, India and China to de-dollarize a part of their reserves to strengthen their own currencies. Because yeah, these four countries have a clue about how to run an economy.

The US dollar continues to be the go-to currency during uncertainty and hit a 20-year high against other currencies just last year. The Chinese Renminbi, the supposed alternative to a dollar reserve currency, has only increased its reserve status from 1% of holdings in 2016 to 2.7% last year…hardly the shift in dominance.

So if the dollar is losing its reserve status, it’s going to take a veryyyyyyy long time. At this rate, it will take 30 years for dollar holdings to fall to even 50% as a percentage of total foreign reserves. Of course, it will probably happen slightly faster than that but it will be so slow as to be imperceptible to 99% of investors. Even someone in their 20s will not likely see the economic effects of de-dollarization.

If you are worried about a sudden collapse in the dollar, then a diversified mix of inflation-proof assets also makes sense. Since commodities like oil, gold and metals are priced in dollars, as the dollar weakens these assets rise in price. Make sure you have some real estate exposure as well as commodities like miners in your portfolio.

Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps.
#china #dollar #reservecurrency

[johnben]

Things are strange right now. The US dollar is becoming less valuable because of inflation, but it's getting stronger compared to other currencies and things like gold and property. People are turning to the dollar because they think it's safer. I'm worried about my retirement savings of about $420, 000 losing value because of high inflation. Where else can we keep our money?

[phillB]

You literally just describe the state of our country. Lack of faith in the government, corruption, and loss of faith and the judicial system. I wasn’t worried about our currency before I heard you make that statement. Damn!

[maddashforroadtripcash]

Finally!!! An anti-fear video.... Fear has taken over the Y.T. algorithm.

[aggierowe]

I have learned to take these finfluencers' advice w a grain of salt. Thanks for a refreshing perspective that is based on common sense. I think most of the folks freaked out by BRICs need to really get out in the world, live outside of the US for a bit. It gives u a different way of assessing other countries and their politics

[t-point]

It’s happening the world is changing I know it hard for you to accept but get ready and prepared.

[LuisFragaPittaluga]

I agree 100%. I am very sorry that people who enjoy the benefits of living in a country like the USA, despise its solid institutions, its fantastic infrastructure and the immense amount of extraordinary companies that generate wealth and employment in a free society, to turn their attention to countries like China or Russia, ruled by corrupt dictators and human rights violators where there are no public freedoms. Do not take what you have for granted; if you do, you could lose it forever. God bless America.

[nicolasbsmith]

Thanks, Joe, for being a voice of reason in all of these shenanigans!

[Musan]

its literally happening, just wont happen overnight but it started now

[umarjongi]

And just like that, Saudi Arabia ends the petrodollar system

[TJC]

😂 the intro alone is worth a thumbs-up

[MatttAt]

That any of these "influencers" still have this platform to use after encouraging their followers to invest with FTX and Celsius though their affiliate links is a wonder in and of itself.

[willyoung]

Thank you for talking some sense in the midst of all the hype and panic.

[seanbebington]

Don't forget about South Africa which is also part of the Brics nations, which is where i am from, and probably by far the worst corrupt of them all.

[Nemo-ynsp]

In the beginning, I watched and listened to a lot of those influencers, but within a few months, culled them down to a handful of those I consider the real deal, like this one, Stock Curry, Fast Graphs, and Sven Carlson.

[MichaelLoges-is]

That makes sense! Gold is forming a triple top that could see a move to the downside

[Reb_Leibel]

membership is on pause mode. Whats up?

[PossumKommander]

I tell my coworkers that the dollar is actually held up by the Navy. The Navy protects and keeps open the trade lanes.

[marymonroe]

This is helpful. I take pause when there are "hair on fire" video dumps! Thank you for the info.

[JohnShumate-eliu]

Trust in the Institutions after the last 2 yrs, you gotta be kidding or not fully awake...

[vjbhatia]

You make some good points, but what about the national debt? Don’t you think the out-of-control that will one day motivate our biggest that holders to dump the Dollar if they sense, a collapse is inevitable?