If America thinks the dollar will always be the world's reserve currency and keeps pushing the limits of monetary policies, Daniel reminds us again to look at the U.K.
The British pound lost its top spot as the world's reserve currency nearly a century ago... If we keep spending and borrowing recklessly, the dollar could suffer the same fate.
The Fed and Washington should warn against the siren calls of Modern Monetary Theory, thinking they can print and borrow endlessly. There is, in fact, an end. If you look at the history of money, nearly all empires crumbled because of a monetary disaster... We're looking at you, Rome.
And you needn't be a top player to destroy the purchasing power of your currency... Venezuela, Argentina, Iran, Turkey, Spain, Greece, Portugal, and Italy (before the euro) – all of them did and do what the U.S. is doing now. Prices change by the hour in parts of Latin America...
Furthermore, if we suffer death-by-printing at our own hands, China's there waiting to pounce (as always). The Red Dragon's cementing relationships with African, European, and Latin economies right now, waiting for the American financial system to stumble and hoping for a reality where their money makes the world go round.
The elections of 2022 and 2024 will be critical in the U.S. deciding on America going European or the States sticking to its capitalistic roots.
We need to keep addressing our irresponsible financial policies, folks. We're getting caught up in petty culture wars as our economy is on the verge of imploding. Empires and societies longer-lasting than our own have fallen in similarly dire fiscal circumstances... Just look at a map of Europe to remember the fallen giants.
As a country, we want to avoid this end. As an investor, you want to pick stocks that rise with inflation. In short, fiat currencies are in trouble, and assets like gold and bitcoin have rarely looked better.
If we're not careful, you might have to pay for that next Starbucks Venti with digital yuan.
Trish Regan
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