Armstrong Economics Blog/USD $ Re-Posted Apr 24, 2023 by Martin Armstrong
COMMENT: Marty; I was in a board meeting and I just wanted to let you know one guy who is there simply because his family had a stake in the company with zero worldly experience, started ranting about the end of the dollar he probably read on that biased _____________________. I asked this fool, should we then move all our company funds to Russia or China since Brazil is too small of an economy? Should we stop dealing with Americans? He had no response.
Separating a fool from his money seems to be a never-ending fact about humanity.
You are the only sane one out there these days
REPLY: I know what you mean. The people promoting this BRICS nonsense have no understanding of the real world. Institutions cannot park billions in Brazil, China, or Russia. Especially in the face of war. The reason the Euro has failed as a serious reserve currency is that there is NO NATIONAL EURO DEBT! Institutions have to still jockey between the various risks of each country and all the Euro did was transfer the foreign exchange risk to the bond market. Sorry, I just do not see where the dollar is in some state of collapse.
When they came to me to create the Euro, I warned them that there would be no single interest rate without the consolidation of the debt. But Kohl never allowed the German people to vote on joining the Euro, so he would not allow the consolidation of the debt. I was told then that they just had to get the Euro started and they would worry about consolidating the debts later. Of course, that never came. Hence, the volatility in FX simply moved to the debt market. The bottom line – the US dollar is still the ONLY place for major institutions to park money – PERIOD! They are not buying Brazil, China, or Russia.
World Trade as a percent of total world GDP PEAKED in 2008 at 61%. It has been in a bear market that will not bottom before 31.4 years taking us into 2040. The sanctions on Russia have divided the world economy and killed SWIFT but it has also ended globalization. To think that the BRICS can replace the dollar with ZERO capacity for international capital to park in such markets is the delusion of absolute fools. China will surpass the USA, but only after 2032.
So here we go again. This nonsense is leading unsuspecting people to follow the piper to divest of dollars and move into what exactly? Most of this is propagated by the gold bugs who will NEVER listen. They hate the dollar because they think gold will rise then. What kind of a world will exist if their doom and gloom were a reality? You might not have any place to spend your wealth. I own gold NOT as an investment, but because of its neutrality.
There is such a major fraud going on with digital currencies with people reporting that the latest scam is using social media to tell people to transfer all their cash to a digital wallet, and BTW – here is the link! If you believe that one, perhaps you would like to buy the Brooklyn Bridge. NYC has a deficit and they will sell it for all the money in your savings. Wake up!