If you do a little search for the US Dollar into Google, you’ll find many articles claiming that it will be toppled in the next 10 years. Whether or not this is true, we have to look back at why this is even being talked about. World reserve currencies are made so that the majority of the world can lean on the most powerful economy and make trading simpler, easier and perhaps even, more attractive. But, they usually only last for 100 years. Britain had the world reserve currency before the US and held it for over 100 years. But, it was backed by gold, currently, the USD is fiat currency. This means it’s not backed by anything.
Photo by Andrea Piacquadio
Where it began
In 1944, Britain was heavily bombed and had a massive national debt. In today’s money, it would be £9 trillion! Considering that the UK economy is currently £3 trillion, this just shows how damaged the country was from the second World War. The USA was given the world reserve currency, by 44 nations of the allies that sent 730 delegates. The agreement was that because the USA was the least damaged economy by the war, that it would have world reserve currency status but it would ultimately be backed by gold. All the nations gave the USA, their gold and it was stored at Fort Knox and other places such as the FED.
Where it went wrong
In 1971, the Nixon Crash happened. This was due to the rest of the world not trusting the USD to survive as there was turmoil in the markets. France wanted its gold back and many other nations were thinking the same thing. Nixon took the USD off the gold standard and attached the currency to the FED. This meant that for the first time in history, FIAT currency was born. Now, paper money is backing paper money. Nothing tangible is backing up the currency, except for public trust. This has meant that the currency has become very weak from expansive printing to suit demand.
What could happen?
Enemies of the USA, such as China and Russia, are trying to get out from under the USD because their economies are largely affected by the global exchange rate. Their currencies are significantly weaker than the USD, so they have to pay more to buy dollars and or import goods. They are considering making the Yuan a world reserve currency but gold is also being bought in the hundreds of tonnes.
What should you do?
Firstly, educate yourself, read DTSS.us blogs about banker frauds. The FED is by far the biggest guilty party. It has printed and printed trillions of dollars since it came into being in 1913. It constantly prints to devalue the currency and make it more competitive and thus, lowering the price of precious metals such as gold, which is touted to replace it. Stop buying US treasury notes, don’t rely on the FED to give you a loan and you will be much freer.
Will the US Dollar survive another 10 years? All indications are that it looks to be a 50-50 chance split.