DETHRONING USD: The US Dollar Will Collapse!

The US Dollar Will Collapse!
The US Dollar has been the world's reserve currency since 1944. This means that most of the world's trade is conducted in dollars and other currencies are pegged to it.

In the last 15 years, the value of the dollar has skyrocketed against all other world currencies. The main reason for this is most countries hold massive trade deficits toward the United States. The US trade deficit is the difference between what America imports and what it exports.

It's a measure of how much more a country buys from other countries than other countries buy from them. The US trade deficit has been growing for decades. And it's only getting worse. The US is importing $2 billion more per month than they export. That means American jobs are disappearing as factories close down or move overseas where labor costs are cheaper.

While it sounds good in theory that the dollar is going up against other currencies, this appreciation is far from a good thing. Because the further away the US dollar gets from other currencies the less the US exports and the more they import. Countries that run a trade surplus to the US will simply buy US treasuries with excess holding which causes the US deficit to increase.

China's trade surplus is a major concern for the United States. China’s trade surplus is at its highest level ever, hitting $260 billion last year. The US imports more from China than any other country in the world, and exports less to them than any other country in the world. China’s current account balance was $200 billion last year which is the largest contributor to global imbalances today. -Chinese companies are investing heavily abroad while foreign investors are pulling back from China due to concerns over intellectual property theft and lack of reciprocity when it comes to investment access or protection of assets by Beijing authorities.

But what exactly is driving the US Dollar lower right now?

The real rate of return on US Government bonds has turned negative. The real rate of return is simply the bond's nominal yield minus the inflation rate. When the nominal yield is less than the inflation rate, this creates a negative real rate of return.
The Federal Reserve is trying to stimulate the economy by keeping interest rates low, but this has a downside. Low-interest rates mean that investors earn less on their investments and have less incentive to save money for retirement or other purposes. This means that people will be more likely to spend now rather than invest in the future. In addition to this, trillions of dollars have flooded into the system through stimulus packages which have pushed bond prices up and yield prices down.

There used to be 3 things you could be certain of - Death, taxes, and the US Dollar as the world’s reserve currency.

But is the US Dollar’s recent weakness the beginning of the end?

- US Dollar Collapse
- Trade Deficit
- Financially Transmitted Diseases
- Negative Real Return
- GDP & The World’s Debt Problem

Katusa Research investigates the history of money, from ancient times to today, and reveals what may be coming next for our global economy. We show you why a dollar-based system is not sustainable in the long term and explore alternative systems such as gold or bitcoin. Our goal is to help investors prepare for changes ahead by understanding what they're up against now.