Why The Dollar Will Never Rise Again - De-dollarisation Has Begun

in #money2 months ago

Hey Jessmericans

First off let me start by saying I do hold dollars. It may be a shitty measurement, but it is FAR better than any other fiat currency, especially compared to my local currency the Rand. I guess the pound and the Euro are relatively okay as the big three sitting on top of a burning pile of worthless paper and fake numbers. The more I learn and read what's going on, the more I am convinced that fiat money as a whole as we know it today begins to die.

At the beginning of the crisis, we saw the dollar rally as people looked to get out of assets and into the dollar thinking they needed cash to be ready for anything this pushed down asset prices like stonks and homes (even though it hasn't reflected yet, banks have already started not to report housing price index numbers, because they know it will drive fear in the market.)

To ensure the asset bubble created does not bring down the broader economy, the fed has pumped multiple Trillions into the economy to drive rampant speculation and asset increases in nominal value due to inflation.

dollardown.png

One trick pony

There was a time where central banks had several tools at their disposal, they could:

  • Lower interest rates
  • Increase interest rates
  • Quantitative easing
  • Quantitative tightening

Now since they've got almost nowhere to go with cutting interest rates with it near zero, its only quantitive easing left to keep this circus going. Sure they can head into negative territory but this only delays the inevitable.

Fundamentals don't matter

In an ideal situation, what the central banks would need to do is collapse the economy by raising interest rates, giving people a reason to hold bonds and begin to clear out all the misallocation of capital. This would lead to far more significant job losses in the short term but bring about a recovery much faster on a stable footing going forward.

This will, however, result in chaos which is why the banks are trying to avoid it and printing the dollar and other fiat currencies to extinction. If the currency dies, at least it's not their direct fault, its seen as a necessary fatality to maintain the status quo.

Hyperinflation won't be pretty either, but it's all we have left.

Finding balance is not an option

At this point, I can't see central banks making any other moves but to print the dollar into oblivion. This means we will see de-dollarisation continue since there's no additional fiat money that can stand up to the dollar we'll have to look at new sound money alternatives.

This is the main reason I am so bullish on Bitcoin and cryptocurrency as a whole as well as precious metals. The dollar had its time, it's been abused, misused and created prosperity for the world but also created a lot of pain too.

It's time to find a balance, a slow transition from the dollar to other assets will allow the world a chance to reset. If we have a life raft, we can allow people to get on, and then allow central banks to make the tough monetary and fiscal decisions to get their fiat currencies back on track.

In my view, Bitcoin and gold could be used to give fiat money a second chance, but I don't think central banks are willing to lose their power and give people ideas of holding their own money.

I think the CBDC will be their next option as they desperately try to cling on to a system that has eaten itself from the inside.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."

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With the free money given to each citizen by almost every country and the economy state due to Covid-19, cryptocurrency is certainly one way to maintain the value of our financial status. What is given away would probably be taken back and I personally feel that taxes and increase of prices in many other items are common ways by most governments so it may cause further financial burdens actually. If our crypto can rise in value, we may be able to balance our financial state more effectively.

!tip

I am on your side, what they give they will surly take back in the future through all sorts of taxes and negative interest rates could also be a possibility. I thnk that good money beats bad money over time and I think crypto is good money or well at least BTC and for me its a game of having my hand in as many buckets as possible and moving them around as I see opportunity

"Why The Dollar Will Never Rise Again"

  • Depends on the asset you measure the Dollar against. In the long term I agree, in the short term (3-5 years) I rather think we live in the midst of a dollarisation. Currencies as the Turkish Lira, the BRL, ARS, ZAR and many smaller ones are depreciating against the Dollar. In an extreme economic scenario the Dollar could swallow one or more of these currencies and their market cap. This would increase the demand for the Dollar by a lot.
  • Example Turkish Lira
    image.png

I also see the USD as a blackhole, the moment they stop printing and exporting inflation with imports we would see other fiat currencies take a knock. I think with the call to bring jobs home we will see less global trade and that's going to put pressure on debt market and smaller fiat currencies will get to points where they cannot service their debt and will have to collapse

Interesting aspects.

The death of the dollar is so imminent.

the fed has pumped multiple Trillions into the economy

This is one of the problem right now.

My next question is how can one get gold right now?

What is the minimum amount?

I’m not sure where you are but you can buy coins they should be easier to get like we have krugerrands, you can also check our sites like goldmoney that store it for you

Or buy paper gold like ETFs or gold backed crypto

the economy moves the world
It hurts that my country is at the bottom of misery and the politicians are getting richer every day

Ain’t that the truth the people always end up paying the price! We all are part of the system and we all played a part in it

certain friend

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