Reserve Currency

It Will Be The Dollar For the Foreseeable Future

I have read all the stuff about banks failing and the hysteria about the dollar not being the reserve currency for world trade for a few years now. Touts are telling people to buy gold, land, or other commodities in preparation for collapse. Don’t listen to them.

I think they are wrong.

My buddy sent me this article. I know that Tucker Carlson and others are fanning the flames of the US dollar going the way of other reserve currencies in history. My first question is, what is going to replace it? The Chinese yuan? Is the world truly going to trust a communist dictatorship with the world’s currency? I don’t think so. Russian ruble? Good luck with that. The Euro? Again, good luck with that. The Euro might not even survive. It has its own problems. The Eurozone economy is big but it’s not the behemoth that the US is.

The writer states, “The United States has been the world’s dominant superpower for decades. But like Rome in the later stage of its empire, the US is clearly in decline. This should not be a controversial statement.”

I strongly disagree. Certainly, the US has problems. We have some irreconcilable differences between factions. But, I agree with Bill Maher in that the US will be extremely hard to break up into independent nations. We might see some change in boundaries like my friend Michael Lotus postulated long ago in his book.

Liberal Peter Zeihan has said that the next century should be dominated by North America if we can get our act together.

Articles that call for the demise of America feed into collective confirmation biases that we on the right wing carry. For sure, the hard left wants ultimate change or what Barack Obama called “fundamentally changed”. As long as we hold onto our founding principles, we won’t see any demise.

Where is the best place to build a startup company in the world? If you answered any other place than America, you answered incorrectly. Certainly, you can build anywhere. But, America is the best place.

Where are the best educational institutions in the world? America. They have problems for sure, but people aren’t flocking to another country to get a cutting-edge education.

Where is the cutting-edge research being done? America. Again, other countries certainly have brilliant people doing cutting-edge research but the largest volume of it is in America.

If you go to a merchant’s street stall in Mexico, Africa, South America, or Asia does the merchant accept Chinese yuan? Probably not. But, everyone will generally take US dollars.

As I read the article I linked to, I certainly agreed with some of the problems the author cites. We have a large national debt. When cities and states are totaled into the national debt, the amount of debt one citizen owes is an unbelievably high number. Heck, each citizen of Chicago owes 42k each to cover city debt. Maybe instead of campaigning for higher taxes, the citizens that want higher taxes could voluntarily send an extra 100k or more to the city coffers to get the debt down.

I can foresee a world where some trade is done in other currencies besides the US dollar. Of course, I can also see a future where cryptocurrency might be used to engage in some foreign trading. But, on the whole for the future as far as we can see I think the US dollar will dominate.

That doesn’t mean we shouldn’t worry and we shouldn’t try very hard to solve our fiscal problems. We need to do that soon. Getting rid of Joe Biden and his gang will be a good first step.