Why The US Dollar is the Next Currency to Die

The dollar has been the World’s Reserve Currency since the 1970s when the Gold

Standard was abandoned by President Nixon. Since then, the US dollar is widely

accepted across the world making it the world’s leading currency. Today 43% of all cross

border transactions use the US dollar. Furthermore, central bank reserves indicate that

the value of the dollar is strong with 61% of these reserves being in dollars.

However, speculation has been rife over the past few years that this currency may die

even as its percentage of the world’s currency supply diminishes. This is backed by a

report by the International monetary fund that shows how the dollar has drifted

marginally to a 15 year low. What this means is that countries that have been willing to

use the dollar are ready to adopt other currencies to do business.

There are a number of circumstances that se the ground for the collapse of the dollar

among them an underlying weakness, the presence of another viable currency

alternative for all and a trigger towards the collapse. Presently, the first condition exists

as the US dollar has recorded a 54.7% decline against the Euro in as span of 10 years.

During this time the US debt almost tripled. Analysts claim that this is a sign that the

U.S. will allow the value of the dollar to decline so as to pay its debt with cheaper

currency.

China is consolidating its share of gold with the hope that it will become the

international currency in the near future. Gold is considered a better replacement to the

US dollar because of its worth. As such, China is buying into the world’s gold reserves in

a bid to create a new currency.

Economists argue that should China succeed in increasing its market share in the world

currency market, then there are high chances that the US dollar will be a loser. Even

then, pessimists hold the belief that this can only work for the Chinese and not the

Americans.

To understand this better, it is worth noting that the reason why the death is the dollar

is inevitable is that an asset backed currency needs to replace it. According to financial

experts, the biggest shock will be in the currency reset that will be followed by the Gold

Trade Standard. Hence the return of the gold standard is near although it will be

through trade vehicles as opposed to SWIFT bank platforms and Forex currency.

Consequently, Gold Trade Notes will be used in the place of a letter of credit.

China’s recent slowing of economic growth as well as potential credit problems has

worked for the dollar that has gained strength over the Yuan. In summary, the future of

the US dollar is worth looking out for in light of the possible return of the gold

standards. Ultimately, there is no need to panic and sell assets as economists will be

available to offer advice on the best way forward for investors as well as speculators.