Lately, the discussion of the dollar’s collapse has come up quite a lot. I’ve had people reaching out unsure about what to do with their money as they’re afraid the US dollar is about to collapse and their hard-earned money will suddenly lose its value. And you’ve probably been bombarded with individuals suggesting now it’s time to transition all your money and savings into precious metals. And they’ve conveniently provided you with an affiliate link or coupon code, of course.
So, what’s really going on? Should you be worried? Are people simply trying to sell you on fear, or is there a real possibility that the US Dollar is on the verge of collapse and we should all be transitioning out of the dollar to a safer currency or over to a tangible asset to shield us from the dollar’s ultimate demise? And more importantly, what, if anything, should you be doing at this time to prepare if the US Dollar is indeed on the verge of collapse? In this video, I’ll try to cover all of these questions as quickly as possible, but before we answer these questions, we need to start by answering the question…
What is a Reserve Currency?
A reserve currency is a foreign currency that is held in significant quantities by central banks or other monetary authorities as part of their foreign exchange reserves. The reserve currency can be used in international transactions, international investments, and all aspects of the global economy. In a nutshell, this is a foreign currency held and used in multiple nations to transact between other countries due to its recognized stability. Since 1944, the world’s reserve currency has been, you guessed it, the US Dollar.
Why is everyone suddenly getting worked up about the potential demise of the dollar? What’s happening on the world stage that is concerning people? We’re seeing China, the world’s new emerging super power make very direct and moves to try and upend the dollar’s dominance in agreements like BRICS, something we’ve covered on the channel before. A more immediate threat the dollar is currently facing that isn’t being discussed as much as it should be is the debt ceiling. At the moment, there’s talk in Congress that the debt ceiling will not be raised in this next round. Now, this threat has happened multiple times before, and each time, it was raised. But this current Congress is like no other in recent history and we watched all types of norms shattered when they tried to find a leader of the house of representatives. If Congress does not address this issue when it comes up for a vote, it could shake the world’s trust in the dollar, which would have incredible ramifications eroding the world’s confidence in the dollar. So there are very real threats the dollar is facing. And to be fair, has the dollar faced threats in the past? Yes, of course, yet it has still stood the test of time.
Of course, you may ask, so what? What difference does it make to me if the dollar is no longer the world’s primary reserve currency. Well, if that happens, you would see mayhem in the markets. Your retirement accounts would be decimated. You’d see a massive spike in interest rates to the point that getting a loan would be all but impossible except for the ultrawealthy. This would freeze up the markets, and nations would bail on the dollar switching over to the new reserve currency or at least the dollar’s position would be severely erroded. Obviously, none of that is good news for the nation issuing the currency, in this case, the US. So, are we really at a point in all of this that we should be concerned that this will happen anytime soon? A quick side note, I did ask you, the community, if you thought the dollar would lose this position in the next 5 years. At the time of recording this video, 53% responded that it absolutely will happen with 33% of you giving it a 50/50 chance of happening.
So where do I stand on this issue? This is where, if we’re all being honest, we fall into speculation. I will say that there are a couple of voices I am currently listening to and studying, namely Ray Dalio and Peter Zion. They present information in various ways and I will say that while they differ in where they see things going over the next few decades, specifically in regards to China, they both agree that this will be a time of great upheaval and change, which is the important point that I am currently focusing on. The dollar’s current status will likely not be spared in the process of change. While it is a possibility that the US Dollar may still serve as A reserve currency alongside another currency (and this has happened before in history), I don’t (and again, this is speculation from my perspective), I don’t see it losing its complete status as a reserve currency any time soon. But I could be wrong, and this is not a hill I’m going to try and die on nor will I argue with you if you have a different view. I’m actively studying this and I can see various paths this whole situation could take. Time will tell. Instead, like you, I’ve come to the conclusion that it’s in my best interest to prepare for a tectonic shift in the coming years which leads us to the point in the video where we try to answer the question: what should I do to prepare for the end of the rule of the Dollar as the world’s reserve currency? Because if it were to happen over a short or long period of time, it would have a profound impact on us all.
So, here’s what I’ll do. I’ll openly share the personal approach I’m taking at this time. I’m not going to get into generic financial advice, but instead focus on real things you can (and should be) doing. You may say, “Oh, so YOU ARE preparing for the demise of the dollar!” Not exactly. I don’t tend to focus on one thing as the reason I prepare. For example, my preparedness strategy is not centered around one threat, but rather I look at this from the perspective of some things could happen and some things I am concerned about may never happen. As such, I have learned to implement prepping strategies that allow me to cover a multitude of threats, and when it comes to the demise of the dollar, the same approaches apply. I think going into this solely focused on one issue being the main threat really puts people in a difficult place if that one thing never happens. And before I share what I’m doing, let me point out one important thing you need to watch closely: the people that are yelling the loudest that the dollar is going to collapse also typically have a product to sell you. It’s always the same. Just watch, wait, and listen. They’ll have a link in the description or comment section or a coupon code to a website that sells a product that will ensure your investments are safe. This is why you’re seeing so many in our community promote precious metals. And trust me, they’re getting a substantial kickback preying on people’s fears. I’ve gotten multiple emails in the last 6 weeks from various precious metal companies asking me to promote their products on my channel. Some have even shared how much some of these other channels have made in the last quarter as a way to try and entice me. And let me say, it’s a lot of money. But let’s get back to the main point here: let me share with you what I’m personally doing for this possibility of the dollar being dethroned (along with so many other threats we’ll be facing in the coming years).
Practical Things To Do To Prepare
You’ll notice these things I’m outlining apply to almost any scenario where you’re preparing for the worst post scenarios to potentially play out. These are the approaches I am currently taking and actively working on. If the world as I know it was about to flip on its head, here’s what I would tell anyone to do to prepare. These are practical approaches, and you’ll see I purposefully avoid specific financial advice that is speculation.
So here we go:
Take care of yourself. Exercise and eat healthily. If you lose your health, you’ve lost everything. Out of shape or overweight? Find a diet and exercise. I know that’s incredibly over simplistic, but it’s the truth. Your health will be everything. Your ability to work and move to handle tasks will be tied to your physical wellbeing.
Work on self-sufficiency. You need to develop the ability to produce your own food and energy and the ability to harvest water. I’m currently investing in building up my growing space on the side of my house to increase my food production and am actively working on learning new grow techniques. I’ve got a solar setup with an off-grid battery system that would allow us to power our house if the grid went down and I’ll be expanding it later this summer. I’ve got a rain harvesting system and will be expanding it here shortly.
Educate yourself about economics and finance: Understanding how the global economy works and staying informed about financial news and trends can help you make informed decisions. When I got serious about finances, I started off reading Robert Kiyosaki’s old financial books, which dramatically changed how I view finances. Maybe you are more conservative financially, and someone like Dave Ramsey or Suzy Orman might be up your alley. Whoever you listen to, educate yourself and here’s the important part: build a plan. Like point #1: when trying to loose weight and get healthy, I focus on a proven plan and work it. Finances are no different. If you don’t have a plan, you’ll be wandering around aimlessly wasting your time and money…a commodity that you won’t be able to waste.
Invest in yourself. What do I mean by this? Over the years, the best thing I’ve done for myself is to learn new skills, to push myself and try never get comfortable on what I know. The future is going to favor those that are adaptable and willing to learn and change. There’s plenty of websites that allow you to learn a new skill. While I have no affiliation with them, Udemy.com is a very popular platform. A lot of people are increasingly leaving the normal college model to instead focus on marketable skills they make them stand out.
Build an emergency fund: Building an emergency fund is always a good financial practice, regardless of the economic situation. Having a cash reserve that can cover your living expenses for several months can provide a safety net during times of economic uncertainty. If you lost your job or the markets crashed, you’ll be glad you have this.
Diversify sources of income: Relying solely on one source of income can be risky in times of economic uncertainty. Consider diversifying your sources of income, such as having multiple streams of revenue from different jobs, investments, or side businesses. Over the years I’ve built various income streams and there’s times where one will produce and others will not. Being tied to just one source on income can really put you in a difficult situation if it gets cut.
Reduce debt and liabilities: Reducing your debt and liabilities can help you weather economic uncertainties more effectively. High levels of debt can become burdensome during economic downturns, as interest rates may rise or job security may be compromised. Paying off high-interest debts, such as credit card debt or high-interest loans, and minimizing liabilities, such as unnecessary expenses or liabilities from investments, can help you improve your financial resilience.
Do these tips sound boring? But where’s the product I’m trying to sell you? Where’s the link to a precious metals website? There isn’t any. You need to take care of, invest in, and educate yourself. You need to get to a point that if the dollar truly does collapse, you can put food on the table, harvest your own water, and produce your own energy. These things we take for granted now may be a luxury or simply expensive in the future. These are all things I’ve done and am actively working on daily. There’s not exciting, but they put me in the best position possible if things do go sideways.
So, where’s the advice about stocks, 401K’s, real estate, precious metals, cryptocurrencies, etc? That’s where we venture into speculation. When we discuss items that may or may not go up in value or outpace inflation, or survive the demise of the dollar, you move into speculation. What is speculation? It is defined as “the forming of a theory or conjecture without firm evidence.” Will the stock market continue on an upward trajectory for the next 5, 10, 15, 20 years? Maybe, maybe not. Over the last 80 years, it has outperformed most commodities. Will real estate hold it’s value forever? Will precious metals outpace inflation or be of any value in a failing market? Will crypto beat out the stock market? Anyone that can tell you with a firm answer “yes” on any of these items is, you guessed it, trying to sell you something. Does that I mean that I don’t hold any of these items? No, quite the contrary. I invest in all of them, but I realize there’s risk with each which is why I diversify. And I think there’s value in all of them, but you need to come to your own conclusion on what you invest in financially. Obviously, you can meet with a financial advisor, but they sell products, and they’re going to recommend the product that makes them the most commission. And again, there’s nothing wrong with investing in financial products. I do an annual contribution to a SEP IRA as there’s a lot of tax benefits. If the dollar doesn’t collapse, or everything doesn’t go to hell in a handbasket in my lifetime, then I’ll have financial means to take care of me and my family. But, as a prepper, the practical things I listed out are the things, that if the dollar truly collapses (or any other major event for that matter happens), I’ve put myself in the best position possible.
How are you preparing for the potential collapse of the dollar? Please share with the community below. How much have you really considered these issues?
I’ll put links to some resources in the description and comment section below if you want to follow up on this more.
As always, stay safe out there.
I’d like to hear your thoughts on the putative CBDC program, and what it means in terms of personal/family economic preparedness.