If you’ve been keeping up with economic and political news, you may have heard of the emerging market currency crisis that’s been unfolding over the last couple of years.
That’s right – Brazil, Turkey, Argentina, Russia and India have all experienced huge declines in the value of their currencies. In fact, over 110 of the world’s currencies have declined.
Venezuela has been the hardest hit by this economic decline, with it’s currency dropping approximately 99% in value!
Could the U.S. Dollar – the reserve currency for much of the world – follow suit and eventually collapse altogether?
It’s hard not to think the dollar’s collapse is imminent when you look at headlines around the web:
- “Why a Dollar Collapse is Inevitable” – SeekingAlpha
- “Imminent Collapse of US Dollar…” – RT.com
- “There’s a New Financial Crash Coming” – FairObserver.com
So what’s the deal?
Will the dollar collapse, leaving millions of Americans with worthless paper in their wallets and value-less numbers in their bank accounts?
The answer is yes, it’s possible. But not without the perfect storm.
Although it’s true that almost every single paper currency system has failed throughout history, the truth is it’d take some pretty serious conditions for the U.S. dollar to completely collapse anytime soon.
Those 2 conditions that could lead to a dollar collapse are:
- An underlying weakness within the currency itself
- A viable currency alternative for the world to flock to
Now, I hear you – it seems like those conditions are already almost met!
The dollar is weak, it declined 54% in value between 2002 and 2012. Add to that the record levels of debt – currently sitting at a whopping $21 TRILLION dollars, and it starts to seem even weaker.
As for an alternative viable currency, the next most powerful currency is the Euro. Could the Euro overtake the dollar as the world’s currency? What about Bitcoin?
Well, the European Union has already considered switching to using the Euro when trading oil with Iran, instead of the U.S. Dollar.
And Venezuelans are already flocking to Bitcoin since their own currency has all but collapsed.
But the US Dollar collapsing isn’t even the biggest thing to worry about right now… There’s a much more insidious issue with the U.S. dollar.
That issue is it’s consistent and inevitable decline in value.
Even if we’re able to avoid total collapse of the USD, it will continue to decline in value in the years to come.
Yup, the banks keep printing more money, and inflation keeps driving the value of your hard earned dollar down the drain.
Just look at this chart on the history of how valuable a dollar used to be:
And this is probably something that you should be worried about much more than an imminent collapse of the dollar.
Inflation is a massive problem with the current monetary system. Hyper inflation is when the currency de-values so quickly that it eventually collapses. That’s what countries like Venezuela have been experiencing.
Take on this example – even at a LOW rate of inflation (2%) what costs $50,000 today will cost over $80,000 25 years from now.
All of this is especially troubling for retirees (or people retiring soon) who’ve worked to the bone to save up their nest-egg so they could live their lives comfortably after finishing the rat race.
To know that the dollar you hold today will be worth less and less every year is enough to make anyone upset.
It’s no wonder so many people look to things like gold as protection of their net worth’s value over time. Gold has stood the test of time as a store of value.
In other words, if gold were “currency” the amount you hold right now, would stay just as valuable 25 years from now.
It’s a hedge against inflation and currency decline.
Here’s another chart to check out:
You can see that gold’s value continues to rise over the same period of time that the value of the dollar has dropped.
So potential US Dollar collapse or not, savvy people are choosing to protect themselves and their loved ones from a money system that’s broken. Young people recognize that precious metals are part of a strong retirement portfolio. And retirees are starting to rollover a portion of their retirement savings into things like gold and silver.
Because who wants to leave it to chance – the hope that the money you have today will buy you the same amount of goods in 5 years.
Better to protect what you’ve got now, regardless of how the rulers of the economy decide to play the game. So, yes, we should worry about the decline of the dollar and a potential collapse. The latter is a possibility, but the former is an inevitability. Lucky for you, there are ways to protect your money so that you can sleep easier. Check out the video below to learn more.