Social and Economic Breakdowns Are Signs of the Coming U.S. Dollar Collapse
The world should prepare to absorb the inevitable U.S. dollar collapse. Wall Street has started to weaken. The stock market appears to have stopped roaring after pushing beyond 22,000 points. The cause behind such market euphoria remains a mystery. Sooner or later, one investor will wake up and pull the plug. The fact that nobody can explain the huge rally should be interpreted as a signal of the coming stock market crash. Yet, one of the main signals that the end of the American dominance is coming hasn’t gotten the attention it deserves: the U.S. dollar.
The U.S. dollar is supposed to rise in value. That’s what the standard financial expectations tell us, given the expectations that the Fed will raise interest rates before the end of 2017. Yet, the signals coming from the streets of America are telling a different story. The strange attention that NFL players kneeling during the national anthem have attracted has not been properly understood.
It’s a sign of eroding social order and values, which weaken the core of the American experience. The dollar is both a symptom and a cause of what appears to be shaping up to be a new civil war. It’s not a fight fought on the battlefield. Social cohesion is loosening in step with financial strength.
The Days of America’s Economic Domination Are Numbered
Surely, the United States is still the biggest economic power on the planet? Such a scenario seems impossible, but the Civil War had both social and economic causes, reflecting a breakdown of the core values of the day. Not all breakdowns necessarily produce bad outcomes. But breakdowns bring change; the kind of change nobody can control. In the 1860s, America’s role in the world was growing rapidly. It was the only democracy with a combination of resources and entrepreneurial spirit no other power could match.
Today, America’s star is fading. The same spirit and combination of factors that made it great could now be weakening it. Financial manipulation has replaced entrepreneurship. Many operators on Wall Street today, those who started their financial career in 2009, can’t even remember how the economy operates in the context of interest rates higher than zero!
That means that for every interest rate hike, the risk of financial collapse goes higher. The scenarios Americans could face are a devastating dollar collapse and a devastating collapse of Wall Street. Of these, the dollar collapse carries the most symbolic weight.
The dollar is the real tool and symbol of American power over the rest of the world. The dollar and its international importance has, for decades, given the U.S. economy the advantage of being able to print the world currency of reference. It has afforded the United States the opportunity to live beyond its means, above its own potential. Thus, it has been able to sustain its constant trade deficit to the rest of the world. The ability to control the dollar has allowed the U.S. government to support its increasingly deteriorating public budget.
The Dollar’s Status as World Currency of Reference Has Come Under “Review”
A gradual replacement of the dollar as a reference currency is in progress. The euro is one such tool. It has suffered from a similar malaise to the dollar. Then there’s Bitcoin and a host of other cryptocurrencies. But, there are also rival economic and geopolitical powers battling for hegemony. They want to replace the United States. China is the obvious challenger.
Indeed, China and its allied powers, like Russia, are moving towards ever greater independence from the dollar. Many of you will say that the dollar is currently very strong, but this is, in our view, only a huge “dead cat bounce” rebound. Now, it will be interesting to understand when and how the collapse of the dollar will take place. In our view, it will come very quickly. The roots of the dollar collapse have already been set in the breakdown of the U.S. social order.
When you see the NFL athletes kneeling, be concerned. Not because of a lack of patriotism or honor. These are the superficial effects the media uses to distract you. Rather, understand what that means about the erosion of U.S. influence and that this has been the real force behind the greenback. Without the perception of greatness, the U.S. dollar collapse is inevitable.