RIP The USD 1944-2024.

RIP The USD 1944-2024. Since 1944, the Dollar has been the world’s reserve currency, dethroning the British Pound Sterling. But all that has changed starting June 2024. Saudia Arabia recently announced it would not be renewing the deal and would begin selling oil in other currencies.

The Bretton Woods Agreement.

In 1944, after the Bretton Woods Agreement, the US. Dollar became the world’s reserve currency.

The Bretton Woods system required countries to guarantee convertibility of their currencies into U.S. dollars to within 1% of fixed parity rates, with the dollar convertible to gold bullion for foreign governments and central banks at US$35 per troy ounce of fine gold (or 0.88867 gram fine gold per dollar).

Wikipedia

The Petro Dollar.

But tying the US dollar to gold made trade deficits and over spending problem. America had just spent billions on the Vietnam war. The US had to print a lot of Traeasury Bonds. Other nations could turn their dollars into cold, hard gold.

President Nixon cancelled the fixed-rate convertibility of US dollars to gold in 1971. In the absence of fixed value convertibility to gold, compared to other currencies, the US dollar subsequently deteriorated in value for several years, making fixed USD to local currency exchange rates unsustainable for most countries.

Since the agreements of 1971 and 1973, OPEC oil is generally quoted in US dollars, sometimes referred to as petrodollars.

Wikipedia

The Petro Dollar stabilized the currency, and the politicians continued to create record budget deficits year after year.

As of the writing of this, the US Gross Federal debt is at 34 Trillion dollars. But that doesn’t even consider the USA unfunded liabilities like Medicare and Social Security. We can’t solely blame the loss of the Petro-Dollar for the demise of the dollar.

The USA’s Federal Debt Bomb!

Government officials don’t talk about it, but the US has the world’s largest federal debt that has ever existed. We rely on the world using the dollar as a currency in order to issue more treasuries and create more dollars into existence.

If the Dollar is going down, what are the average citizens to do?

Unfortunately, the average Americans will do nothing. Aspire to be the non-average citizen, the financial outlier. You must have emotional fortitude, a very tough investment strategy and inflation proof income.

• Emotional fortitude by seeing the disaster ahead and making plans to protect your family’s financial future. By preparing yourself in advance, things may still be scary, but not as frightening as being caught off guard by the coming dystopia.
• Invest in asset classes that will grow during the fall of the dollar and the rise of high inflation. Gold, silver and other precious metals will rise in value against the falling dollar. International stocks will see growth in comparison to the dollar. Alternative investments such as investing in mobile home parks. Things people cannot do without like food. Investing in grocery stores.
• Inflation-Proof-Income. Is your current income inflation proof? Can you be fired if the industry you are in takes a down turn? During times of stag-flation sectors contract because people have less money to spend on other things than essentials. How can you be sure to have a rising stream of income during hard economic times? You need resilliant growing inflation proof income!