What could be ahead for the US dollar?

less than 1m read

·Nov 8, 2024

Throughout the last, you know, 30-40 years, there have been many moments where we said we're on the brink of collapse. What is the time frame you think for when this is going to get really bad? And when it does get really bad, what would that actually look like?

So, what Japan has done is by printing a lot of money, they have had their currency go down. That currency decline is the way it's appreciated. So, if you have a bondholder in Japan, they've lost about 80% of their value in their purchasing power. That becomes the dynamic; that's the same sort of dynamic.

So, the next thing I think that you're going to see with the in the United States is you're going to see a squeezing of consumption. At the federal government level, as the debt service payments are rising and the debts are rising on those, you're going to see the squeeze. There's very little room between entitlements that are fixed payments and the actual revenues that are coming in. You're going to start to see that squeeze.

The real issue will become if you start to see the selling of those bonds. The next red flag to go up is when the government, when the Federal Reserve, and other central banks come in and buy again. The next time that is a very risky point is when we have the next economic downturn, and I think that that probably will be within the next four years.

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What could be ahead for the US dollar?

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