Changing the dollar looks like they’re dumping it the world’s largest oil producer Saudi Arabia is reportedly asking to join bricks as more and more developing nations including some of the world’s largest economies decide to ditch the dollar in their bilateral trade versus of concern and even despair
Being heard in the U.S over the looming end of America’s Global Financial dominance hi my name is Andre dick hope you’re doing well come for the finance and stay for what’s being called the end of the US dollar as countries like Brazil Russia India China and South Africa are
Teaming up to create their own alternative to the global World Reserve currency that of course was and still technically is the US dollar people are calling this the D dollarization of the world and this is probably one of if not the most important Financial events
That’s going on in the world today and I want to help explain how this will affect us let’s start with the concept of world Reserve currencies and what it actually means to be one because the US dollar was not always the world Reserve currency before the US dominated the
World Reserve currency status there were others that eventually ended like France which held the reserve status from 1720 to 1815 followed by Great Britain from 1815 to 1920. the US dollar became the world Reserve currency shortly after that with the creation of What’s called the Bretton Woods agreement in other
Words the U.S has held its World Reserve currency status for about a hundred years now and according to billionaire Ray dalio who studied this he says this changes every 94 years or so so we’re technically past the point of expiration so why is all of this happening all of
The sudden first what is a world Reserve currency and why does the world need one once a currency becomes a global World Reserve currency it’ll usually come with three new superpowers number one stability stability allows for international trade and if you want to trade with each other you need a Common
Language and a common money that everyone can agree to most countries just don’t trust each other because they don’t know how much the other country is printing its own monetary Supply so how much is that money really worth so instead they could use a world Reserve currency knowing that no matter what
Asset or commodity they trade it’ll always be backed by something stable and something that has value the second superpower is that the country with the world Reserve currency becomes an investing Powerhouse because the world likes to use the most stable money which right now are dollars the world also has
To have a dollar wallet those are called foreign exchange reserves which are partially held in dollars but just like every other U.S Bank not every country will use all the money inside its dollar wallet so what it doesn’t use it will then invest into U.S treasuries and securities countries like Japan China
And the UK are some of the largest holders of U.S assets through their foreign reserves and all in all the US has anywhere between seven to eight trillion dollars worth of foreign investment just for context that amount of money is about the same size as the
Entire GDP of Germany the UK and India combined now the third superpower of the US dollar is the Dollar’s exclusive ability to buy oil shortly after World War II since the US was pretty much the only standing superpower left it created something called the Bretton Woods agreement which essentially tied all
Currencies around the world to the US dollar and the dollar became extremely powerful but a couple decades later something happened in 1971 the U.S ran out of money in 1971 president Richard Nixon announced to the world that 35 US Dollars would no longer redeem one ounce of gold like was originally promised I
Have directed secretary Conley to suspend temporarily the convertibility of the dollar into gold or other Reserve assets except in amounts and conditions determined to be in the interest of monetary very stability and in the best interest of the United States instead the only thing that dollars would be
Able to redeem is just more debt and by 1971 the US had been using the Dollar’s dominance for decades to get themselves favorable foreign policy so the question is when the U.S ran out of gold why didn’t the rest of the world go back to using their own currency
And the answer is because they couldn’t because of that third superpower in 1945 President Franklin Roosevelt set up a secret wartime meeting that would change the course of U.S history very few records were kept from that meeting but Roosevelt promised the king of Saudi Arabia protection in exchange for the
U.S to have the exclusive right to develop oil from Saudi Arabia meaning if another country wanted to buy oil because they need to power their country which is something they did need and still need to do they also need US Dollars that’s the birth of the Petro
Dollar and that’s also why every single U.S president since that meeting has cozied up to Saudi Arabia to maintain those positive relationships our house is your house there’s an Arab saying the Sands are blowing and I submit to you King fahaden that if the sands of time
Give us any hint of the future it is that in the days ahead the friendship between the Saudi Arabian and American people will be a strong and vital force in the world those three superpowers the stability for trade becoming an investment Powerhouse and the exclusivity to buy oil has given the
U.S Global dominance over the last century and sometimes the US has used that dominance over other countries to cut them off from their life force that is energy but when that happens some countries will Rebel especially ones that can produce their own energy that’s why we’re seeing those relationships
Fall apart and new alliances are being created to challenge the supremacy of the US dollar now hold on a minute if you actually look at the value of the dollar today it’s going up in fact it’s somewhere near the highest point over the last 20 years so why are people
Saying that the dollar is going down if the price is going up there’s a couple reasons for that other than the price if you look at the amount of dollars held around the world that number is gradually coming down reason number two the US just reminded the entire world
How powerful the US dollar can be if it’s used against your country like Russia for example which had its dollar wallet or its foreign exchange reserves Frozen and threatened to be used to Aid Ukraine and because of that reason number three countries are partnering together and forming their own alliances
With the help of Russia that’s providing the energy and all of this has been happening gradually behind the scenes for a really long time now in the year 2000 for example the UN allowed Iraq to sell oil denominated euros and not in dollars by 2007 Iran completely stopped
Selling oil in dollars in 2014 Russia and China signed a deal to bypass US Dollars and then Iran and China ditched the dollar through their 400 billion dollar investment deal followed by India and Japan teaming up Russia and Iran Iran and India and the list goes on and
On and now more recently in the news we’re seeing China and Saudi Arabia teaming up together to form a competitor to the Petro dollar that is now being called the Petro Yuan alliances like the brics Nations which represent 31 and a half percent of the world’s GDP are also
Getting stronger as more and more countries are wanting to join even the federal reserve’s Jerome Powell has told us that it was possible to have more than one world Reserve currency it’s also possible to have more than one large Reserve currency there have been times when that was the case and that’s
Why some people are believing that right now we’re starting to see the beginning of the end of the US dollar so the question is is this actually happening though or is it just more click bait from the media to get some views and to get some people to sell you something
Shiny there is truth to all of it but the truth is somewhere in the middle so before you freak out about the end of the dollar I did some digging and let me show you what I found the end of the dollar as a concept has been predicted
And talked about almost every single year for decades now and here’s just a couple articles to prove that point here’s one from 2004 warning about the disappearing dollar here’s one from 2006 about the end of the Dollar’s dominance another from 2009 China displacing the US dollar 2012 2015 here’s one all the
Way back from 1975 about OPEC cutting its link with the US dollar there’s probably articles that are way older than what I was able to find that say the exact same thing but the point is the world is trying and has been for an extremely long time to replace the
Dollar but not everyone agrees that the dollar will be replaced some people argue that if this does happen it’s gonna happen over an extremely long period of time and here’s some evidence for that argument like for example this chart which shows the share of transactions in Dollars around the world
Versus other currencies in the last 35 years since each transaction has two sides it adds up to 200 percent but this chart only shows the biggest currencies but what the data really shows is that the dollar is still extremely stable the Chinese yuan is growing in the chart I
Just showed you but it’s growing at the expense of the Euro and the Japanese Yen losing influence but not the dollar now you might have also seen this chart in a couple videos which shows how central banks have been reducing their dollar Holdings so it seemed like the dollar is
In fact getting weaker but the explanation here is that the reduction mostly happened around the 2008 Global financial crisis in a time of instability and great uncertainty when really no one knew what would happen to the world but if you look at the value of the dollar itself it’s actually going
Up that’s because the Federal Reserve is increasing What’s called the federal fund interest rate and that is still attracting foreign investments around the world to park their money inside of Treasury bonds remember that second superpower that the dollar has and that in turn is still strengthening the
Dollar that is happening today so the US is still seen as an economic Powerhouse of stability and that’s not changing anytime soon from any data that I was able to find so it seems like based on history anytime a world Reserve currency changes it happens through a major
Conflict now maybe this time will be different but no one’s really sure exactly what would happen to the economy some people argue that the US would lose its ability to export dollars therefore more dollars would stay in the US and that means higher inflation like we saw
During the pandemic some people argue as a result that would mean Commodities like gold would just Skyrocket and we could go back to the golden standard but those are usually the people that have gold to sell you some people say that we would see hyper bitcoinization but those
Are also usually the people that have Bitcoin to sell you some people argue that if this were to happen it would be a reckoning like no other and once it does there would be no going back prepare for the end of the world that’s probably the extreme opinion here but
It’s also the one that gets the most views on the internet but still before you freak out and move to a new country and learn a new language consider this of the 750 currencies that have been around since the 1700s less than 20 percent of them are still around today
All currencies have the fate of rising and then eventually falling and the US dollar is no different and yes we’re seeing that in real time happening right now but it’s also going to happen over the next few decades and perhaps not even in our lifetime because the truth
Is the dollar is not really going anywhere most Commerce around the world is still happening with dollars so if it does happen it’s going to take an extremely long time but still just to be transparent with I want to share with you my personal investment strategy rather than focus on what I can’t
Control I’m instead going to focus on what I can which is to save as much money as I can and invest it into low-cost broad market index funds like vti or vo and do that continually and reinvest all my dividend income because by doing that it allows me to build up
My passive income so I don’t have to rely on the income from a job in an otherwise potentially unstable economy and if inflation ever happens then that money will still grow and that’s also why I invest in Bitcoin which is my alternative to gold which in and of
Itself is a hedge against the dollar but in the meantime I think about investing like I’m hiring every single CEO on Wall Street and their executive to figure out the best way to make my money work for me instead of the other way around and
Anytime I go to the store I’m like all of you guys work for me not really that’s not how it works but kind of does that’s been the best strategy historically speaking as always have a wonderful rest of your day smash the like button subscribe if you haven’t
Already don’t forget to grab your freestyle links are down below and then go track them automatically with a spreadsheet link Down Below in my patreon love you thank you so much for watching this video we’d love to see you back here on Monday Friday sometimes Wednesday see you soon bye-bye
