Why do so many think that the US dollar is soon to collapse?

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Anonymous: Why do so many think that the US dollar is soon to collapse? They’ve said this before, but has it ever happened?  Nope.


Oil and other commodities in the world are traded with US currency, which means countries and companies buy US dollars to hedge against currency fluctuations.  It keeps the worlds currencies relatively stable, which is good for business.  Electric cars are about to to overtake the internal combustion engine.  This will reduce (but not eliminate) the need for the companies to keep the currency.

Governments are looking to make other alliances as the US can no longer be relied on to keep it’s promises.  They will also buy each others currency and reduce the amount of US currency they have.

“Because the US dollar, like many other currencies, is no longer a representation of physical things, like gold.  Rather, the US dollar is pegged to ANOTHER currency, which in turn is pegged to ANOTHER currency, and so on…  This is how hyperinflation happens.”


An explanation by Vaor.

the u.s dollar is the dominant currency around the world it’s the global reserve currency now a lot of people are saying
that the dollar is at risk of losing that status and losing that privilege if the dollar were no longer the global reserve currency that would be extremely bad news for everyday americans.

Since the 1960s, many have announced the end of the dollar as the central currency of the international monetary system. The end of convertibility into gold, floating exchange rates, the 2008 crisis were all events that were supposed to sound the death knell for the American currency. However, this remains the first currency for foreign trade and, by far, the first reserve currency.

The rise of China inducing a fragmentation of the world, the growing public deficits of the United States, the contestation of the rule of extraterritoriality are all elements that are put forward to put an end to the right of monetary seigniorage imposed by the United States since the end of the Second World War on the rest of the world.

59% of foreign exchange reserves.

The dollar remains by far the pillar of the international monetary system, being the main trading and reserve currency. Thanks to the depth of the American financial market, the volume of assets listed in the United States, the dollar remains unavoidable. Even if a slight erosion is observed, the American currency represents 59% of foreign exchange reserves. The RMB, the Chinese currency, plays a marginal role in this respect with 2.79% of foreign exchange reserves (2021). This situation is paradoxical for a country which for several years has been the world’s leading trading power and whose GDP is the second in the world. It is explained by the weakness of the Chinese financial sphere, by the absence of transparency and by the undemocratic nature of the regime.

The dollar can rely on the military, economic and democratic power of the United States. With the proliferation of sanctions imposed by the United States on countries such as Iran or Russia, or on companies in the name of extraterritoriality, some believe that it is necessary to guard against these risks by no longer resorting to dollars. . For some governments, freezing Russia’s foreign exchange reserves, estimated at 500 billion dollars, and banning the use of the Swift interbank information system would be arguments for leaving the dollar zone.

In times of crisis, the American currency plays a role of safe haven.

The rejection of the dollar does not translate into facts. On the contrary, in times of crisis, the American currency acts as a safe haven. Whether during the subprime crisis in 2008/2009, during the sovereign debt crisis in 2011/2012 or since the start of the Covid epidemic, the dollar has appreciated, proving that investors place their capital in this currency.

The war in Ukraine has been accompanied by an increase in capital inflows into the United States. The dollar remains unavoidable because there is no alternative. The United States remains by far the leading military power. They have reliable allies enabling them to implement comprehensive sanctions against States that constitute a danger. The United States was notably followed by Europe, Japan and South Korea for the sanctions against Russia. Few countries wish to place their foreign exchange reserves in RMB for fear that a conflict with the United States will cause them to become blocked.

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