The United States Has Become A Banana Republic

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The U.S. dollar is being rapidly destroyed by the current money printing policy. Several experts have been warning the collapse may happen sooner than expected, which means we will be seeing the debasement of our purchasing power as prices continue to soar amid the astronomical surge of inflation in all fronts of our economy.
If the central bank keeps enacting Quantitative Easing policies at the current pace, it won’t be long until our fiat currency becomes worthless paper. Investors across the world are already realizing the dangers of keeping their assets in U.S. dollars, that’s why economists are arguing that our currency’s hegemony is declining. And with other currencies performing strongly, the U.S. is at risk of losing its position as the owner of the leading global reserve currency. That’s what we are going to expose in this video
Once the health crisis hit America, our policymakers decided to go on “full Weimar” mode and never look back. The expansion of our monetary supply almost went vertical, and it continues to climb as more money printed out of thin air keeps being pumped into the economy. The Federal Reserve has set an official target rate of inflation to hit 2% per year. But as financial expert Marin Katusa has recently explained, by hitting its target the Fed is essentially leading the dollar to lose around one-third of its current value.
James Turk stated in a recent tweet that prices are already rising in soybeans, stock indices, crude oil, copper, BTC & many more items. “Money printing by the Federal Reserve means inflation in 2021 is baked into the cake,” he warned. M1 increased by over 50 percent in 2020. The blow-up of the money supply is truly alarming. It practically makes all the inflation that has come before look quite insignificant as compared to what we’re experiencing right now.
Whenever new money enters the financial system, every dollar that people currently own becomes less valuable. As our paychecks won’t rise at the same speed as the money supply, they will become less valuable as well. So we will buy increasingly less as products and services become considerably more expensive.
As several economies and global trade completely stalled, governments around the world collectively started to move towards the introduction of negative rates and money printing policies. And once countries start to massively pump liquidity into the economy, there’s no going back. A clear demonstration of it can be seen in stocks.
Consequently, in view of the incredible amount of printed money, the dollar has gotten weaker and its weakness has reverberated through the markets and pave the way for real assets to perform exceptionally well. Now, it currently faces its largest short position since 2014. That is to say, investors have been betting against U.S. dollars at levels not seen in years.
While it loses its credibility amongst investors, the dollar’s position as the most dominant global reserve currency gets greatly shaken. The status of hegemony is what guarantees the support to the ballooning US government debt, the Fed’s money-printing frenzy, and Corporate America’s ambition to offshore production to cheap countries, which in turn, creates an enormous trade deficit. They all have become dependent on the willingness of other central banks to hold large amounts of dollar-denominated paper. However, apparently, those central banks are getting cold feet.
The global share of US-dollar-denominated exchange reserves has dropped to 60.5% in 2020’s third quarter, hitting the lowest level since 1995. With a stable Euro and a rise in the share of the Japanese yen as second and third reserve currencies that actually have large trade surpluses with the rest of the world, the dollar’s trade deficit might become a liability.
The only ones that have been actively benefiting from the inflated money supply are the ultra-wealthy. According to a report by economy writer Martha C. White, one of the main drives of billionaire wealth concentration was the “unprecedented” monetary policy response to stabilize financial markets during the burst of the sanitary outbreak, resulting in the “stock market’s gravity-defying rise”. From then on, the United States gained 56 new billionaires.
Meanwhile, almost 60% of our population has experienced or is still experiencing financial setbacks and since our authorities are likely to keep responding to every crisis with more money, we’re headed to a hyperinflationary path and to the total degradation of our fiat currency. In short, as the dollar collapses, the inequality gaps widen and economic deterioration gets a whole lot worse.

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Epic Economist

Epic Economist

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