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After the Great Financial Crisis of 2008, a number of macrodoom-and-gloomers began to predict a collapse of the US dollar.

The Fed was “printing” trillions of dollars.

Interest rates have never been this low before.

It was an appealing narrative if you were someone caught in the negative feedback loop of the biggest economic crash since the Great Depression.

In recent years, it was the crypto maximalists who began to predict the end of the global reserve currency status of the dollar.

Alas, the US dollar is stronger than ever. Here it is against the other major currencies of developed countries this year (via the WSJ):

It’s not just this year. For years, the dollar has been growing strongly:

Now it is important to remember that currencies, in general, are cyclical.

You can see that the dollar has more or less gone nowhere against a basket of other developed market economy currencies over the last 5 decades or so:

Put another way, a basket of other market economy currencies developed over the last 5 decades or more has gone nowhere against the dollar.

But the main takeaway here is any prediction of an imminent collapse of the US dollar was a terrible bet.

Could the dollar be overtaken one day by another currency or digital equivalent?

But a total collapse of the US dollar?

This seems unlikely to me anytime soon.

Well, this country has an abundance of natural advantages over the rest of the world that help give it global reserve currency status.

There is no natural heir to the throne. In the 1980s, it was Japan that was to overtake the United States as a global power.

Now China is nipping at our heels.

China has seen immense economic growth in recent decades and has over a billion people.

But look at China’s demographic outlook:

Economic growth is basically a function of population growth and productivity.

China could be in trouble in the coming decades.

Geography. European countries are within spitting distance of a crazy dictator who went to war for no reason.

We have a large ocean to the east, a large ocean to the west and friendly neighbors to the north and south.

We dominate consumer technology. The Internet and the smartphone are two of the biggest innovations of the last 50 years or more and American companies dominate these technologies.

We have Apple, Amazon, Facebook, Microsoft, Google, Nvidia and more.

And not to mention how a company like Tesla has forced the entire automobile industry to change its entire business model going forward.

Energy independence. Europe is in one of the worst energy crises they have ever faced. European citizens find themselves facing extraordinarily high energy bills at a time when there are not many great solutions.

The United States is not immune to rising energy prices, but we are in much better shape than our neighbors across the pond. We have a lot of oil, natural gas and coal.

Nobody likes higher gas prices, but we are in much better shape than the rest of the developed world when it comes to an energy crisis.

We still have the global reserve currency backed by the most powerful militaries in the world. Currencies are strange when you consider that they are more or less supported by faith and not much else.

But the US dollar is also backed by a huge tax base with the most powerful military on Earth.

Maybe that doesn’t mean as much as once if we don’t have a world war, but it’s not bad to have a military force that keeps your currency strong.

People still want to live here. Our immigration policies are not perfect at the moment, but people from all over the world want to live here.

Immigrants founded more than half of all start-ups that are valued at a billion dollars or more. Almost 80% of those start-ups have an immigrant founder or an immigrant in a key C-suite role.

As long as things don’t get too bad in the years ahead, people from other countries will still want to live here and start businesses.

The US rules pop culture. The world is getting flatter in terms of entertainment, but America remains the biggest exporter of wonderful TV shows, movies, celebrities, music and professional sports.

The United States does not set any trends in the world, but we have a pretty strong track record of producing the best content bar none.

(OK, this probably doesn’t belong on our resume, but it’s the icing on the cake.)

We have the largest and most dynamic economy in the world. The United States is not dependent on any one industry or commodity like many other developed and emerging economies.

We have the largest and most diverse stock market in the world. The United States has been around for a few hundred years, but we’ve only been a real power for less than 100 years.

Just look at the relative size of global stock markets in 1900 and the change since then:

The United Kingdom has fallen on hard times in recent years, but they have ruled the globe for hundreds and hundreds of years.

I’m not sure many people would have predicted that the United States would dominate the 20th century like we did.

Is the fall of Rome possible here? Yes of course.

But it is not like our kingdom has been for centuries.

American economic dominance really only began after World War II, so we’re talking maybe 70 years or more.

Being bullish in America does not mean I am bearish in the rest of the world.

On the contrary, I think technology has leveled the playing field and offered people in other countries far more opportunities than they had in the past.

They are a long-term global bull as people in other countries certainly wake up every day wanting to improve their station in life.

But I don’t want to bet against the United States, even if we don’t dominate the 21st century like we dominated the second half of the 20th century.

Further reading: 50 ways the world is better

Which countries dropped the U.S. dollar?

Contents

  • 2.1 Australia.
  • 2.2 Brazil.
  • 2.3 China.
  • 2.4 European Union.
  • 2.5 India.
  • 2.6 Iran.
  • 2.7 Japan.
  • 2.8 Russia.

Has the US dollar been deflated? The most recent example of deflation occurred in the 21st century, between 2007 and 2008, during the period in US history called by economists the Great Recession. See the article : Joint statement between the Kingdom of Spain and the United States of America.

What happens if countries drop the dollar?

A weaker dollar buys less foreign goods. This increases the price of imports, contributing to inflation. When the dollar weakens, investors in the benchmark 10-year Treasury and other bonds sell their dollar-denominated holdings. Contracts for oil and other commodities are usually denominated in dollars.

What makes the US dollar drop?

A variety of economic factors can contribute to the depreciation of the US dollar. Read also : Why the United States Needs NATO. These include monetary policy, price increases or inflation, currency demand, economic growth and export prices.

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Should I cash out my 401k before economic collapse?

Don’t Panic and Withdraw Your Money Too Early It is especially important for younger workers to ride out market downturns and reap the rewards of future recovery. Read also : $ 450 Million New US Aid to Ukraine – US State Department. Even people approaching retirement age can recover from the crash in time for their first retirement.

Should I reduce my 401k contribution when the market is down? Don’t reduce your 401(k) contributions, or allocate new savings to stocks, just because the stock market is struggling at the moment. In fact, a bear market is often the right time to increase the percentage of income you contribute to your 401(k) if you can afford to do so.

How do I protect my 401k during a market crash?

To protect your 401(k) from the stock market crash, invest more in the bond, which has a lower rate of return, but also a much lower risk. To gain the most value possible, heavier investments in stocks give you the best chance of multiplying your money. However, with stocks comes increased risk.

What will happen to my 401k if the market crashes?

Can You Lose Your 401(k) If The Market Crashes? While a 401(k) can be a great way to save for retirement, it’s essential to understand how it works. Your 401(k) is invested in stocks, which means the value of your account can go up or down depending on the market. If the market goes down, you could lose money in your 401(k).

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Why is my 401k losing money right now?

There are many reasons that your 401(k) may be losing money. One of the reasons is that the stock market is just going through a period of decline. Another reason that your 401(k) may be losing money is that you invested in a specific company or industry that is not doing well. Finally, your 401(k) can lose money because of fees.

Can you lose all your money in a 401k if the market crashes? Can You Lose Your 401(k) If The Market Crashes? While a 401(k) can be a great way to save for retirement, it’s essential to understand how it works. Your 401(k) is invested in stocks, which means the value of your account can go up or down depending on the market. If the market goes down, you could lose money in your 401(k).

How much has the average 401k lost this year?

Summary. Depending on your risk and diversification, you have lost between 4% and 20% so far this year. Unlike most other periods when stocks lost money, bonds did not defend well this time. Target date funds have a wide spread of benefits for those nearing retirement.

Why is my 401k balance so low?

Technical reasons why 401 (k) Balances are so low First, the immaturity of the 401 (k) system means that many 60-year-olds do not have access to a 401 (k) plan before their career. Thus, they would have accumulated less than covered workers throughout their working lives.

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