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Here’s Why the U.S. Dollar Collapse Could Become a Reality Soon Lombardi Letter 2019-07-02 14:02:16 U.S. Dollar Collapse U.S. dollar U.S. economy A U.S. dollar collapse could become a reality soon. It’s important to watch tge two factors that could hurt the value of the U.S. dollar. Here’s the full story. Analysis and Predictions,U.S. Dollar https://www.lombardiletter.com/wp-content/uploads/2019/06/Could-a-U.S.-Dollar-Collapse-Happen-in-the-Near-Future-150x150.jpg

Here’s Why the U.S. Dollar Collapse Could Become a Reality Soon

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Could a U.S. Dollar Collapse Happen in the Near Future

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Don’t Rule Out a U.S. Dollar Collapse Just Yet

The U.S. dollar may be the king currency right now, but its long-term outlook looks grim at best. A U.S. dollar collapse could become a reality sooner rather than later.

Before going into any details, let’s be clear: it’s very unlikely that the U.S. dollar will collapse overnight. It could be a very long and dreadful process, picking up the pace trust in the currency is lost.

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Now, here is why the U.S. dollar could soon collapse.

These Two Factors Could Cause a U.S. Dollar Collapse

Keep in mind that currencies are not backed by gold anymore, but by their respective governments’ ability to pay their debt and the overall economic activity of their country.

Sadly, the fundamentals of the U.S. economy are not very strong.

The U.S. government is becoming reckless. It already has too much debt and continues to add on it.

At the time of writing, the U.S. national debt stands at $22.02 trillion. (Source: “The Daily History of the Debt Results,” TreasuryDirect, last accessed June 18, 2019.)

This figure could get much bigger as the government continues to spend more than it receives. In the first eight months of fiscal year 2019, which began in October 2018, the U.S. government has incurred a budget deficit of over $738.0 billion. (Source: “May 2019: Monthly Treasury Statement,” Bureau of the Fiscal Service, last accessed June 18, 2019.)

For fiscal-year 2018, the government’s deficit was around $779.0 billion.

The government is on track to report a much larger deficit this year, with no balanced budget in sight for at least the next 10 years. It wouldn’t be a stretch to theorize that the U.S. government debt will soar to $30.0 trillion within that decade.

Will the government be able to pay it off? Well, the country’s economic performance, relative to the historical average, is poor. And it doesn’t look like it will improve anytime soon.

As a matter of fact, economic data and indicators suggest that a period of slow growth, and even an outright recession, could be ahead.

U.S. Dollar Outlook and Things to Look Out For

History shows that whenever a government goes out of control and the country’s economic performance faces headwinds, the currency’s value tumbles.

As I said earlier, the U.S. dollar is currently king. It’s also deemed a safe haven by many. In times of uncertainty, we see investors rushing to buy the greenback.

But as fundamentals deteriorate, don’t be shocked to see the dollar’s value tumble. At the moment, the only thing holding the U.S. dollar aloft is trust.

Imagine what will happen to the dollar if the government can’t pay back the $22.02 trillion it has borrowed.

If the economy goes through another financial crisis, will the U.S. dollar be able to hold its value?

Americans could have a very hard time, suddenly having to pay a lot more to buy things.

For investors, a U.S. dollar collapse would mean an instant tax on wealth. Savings and investments could be valued at much less.

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