116. Why the US Dollar is Still King

[DayTradersWin]

I like your video - subscribe to my channel and friend to have day trade videos

[snitchboy12]

you lost your mind because the world is not buying the paper dollar anymore. GOLD AND SILVER is real money. You US dollar is fraud and is being printed at a fast rate the world can't keep up...........

[quadcatfly]

@snitchboy12 aman.

[DontBuyChinese]

@snitchboy12

OK then, if it is fraud, then obviously the Chinese along with many other countries that buy US debt, know this.

So, are they just STUPID?

[KhmerD0g]

the dollar is the world reserve currency and nations like china and others peg their currencies with the dollar. by doing so they are making it cheaper for us to buy their products thereby pushing unemployment to us. they also making us run deficit.

[inkey2]

yes, but isn't the credibility of the USD dropping by the day? It may be ok at this moment but isnt the USD on the slide?

[definemaybe]

what do you create? ever build anything? ever help anybody but yourself. you have something to sell, i bet and i won't even watch your video.

[neilutubename]

I think you meant to title this "how the US Dollar BECAME king." You did not make a strong case to me that it is at all, an enduring paradigm. There are growing tensions over US policy that encourage geopolitical competitors.

[randy95023]

Hey, the dollar is SO strong let's print a couple Trillion out of thin air and scatter them in the wind! I wonder if the dollar will remain strong?? Thanks Obama!!

[RawMeatRocks]

Just check out a ten year U.S. dollar index chart. It is not king, it is crap. And will be much more crap, very soon.

[jetmanrun]

The US dollar is losing it's popularity worldwide and will soon be dethrown as a king currency. The USD is the most unreliable untrustworthy currency there is and all people will eventually realize the USD is the biggest scam out there. So Dick, I suggest you re-emphasize your video analysis because you are way off track.

[DontBuyChinese]

@jetmanrun

WON'T HAPPEN IN YOUR LIFETIME.

[jetmanrun]

@DontBuyChinese

Ohhhh, yes it will. If not this year, most certainly next year.

[ForexFrenzy]

Nice explaination of how many nations use the readily available $ , and so got into the Sub Prime fiasco in the process...

[lordfairgo]

hi dave, u are doin an awesome job, i found your educational videos quite concise yet very informative, keep up the grt work. I just had a qs which might b unrelated to this particular post which is

" if lets say rougly 70% or 2/3rd of us dollar in circulation are held due to various reason out side US in what scenrio they will come back to US and lets say they do then 2nd Qs how will US intrest rate exchanfe rate and inflation play out.

[InformedTrades]

Hi, Thanks for the comment and for watching I am glad you are enjoying the videos. In short because I am limited to the amount of space here what would potentially cause this is a loss of confidence in the dollar as reserve currency which could happen because of too much debt of bad monetary policy. If this were to happen the US Dollar would weaken, and the fed would most likely be forced to raise interest rates to combat higher inflation which would result. Best Regards, Dave

[KARStarla]

I laughed when I saw the picture on the video lol George Washington with shades lol

[hater172]

The American dollar is gonna be just as good as monopoly money real soon.

[garansbarans]

Trading real consumer goods for worthless IOU's (dollars) is an unsustainable scenario. Trillions of dollars amassing overseas will come home to roost when other countries realize it's in their best interest to dump the dollar and quit propping it up. The results, I believe, will be catastrophic.

[jakeasturm]

I love fiat money.

[joshrain1]

It is true that USD is a king because of its reserve status, you have to ask why was it considered to be a reserve currency in the first place. It was because it was backed by gold, political/financial stable and strong military. Now because of bad policies and huge current a/c deficit this cannot continue longer.  why should the world sell us goods for paper backed by nothing. if the US were to declare bankruptcy we would still owe money. currency like that cannot be reserve.

[AirelonTrading]

B I N G O

I really wish people who've fallen for the "USD is done" trap would understand that they HAVE fallen for it. Everything ties back to the USD. Looking forward to this series. In Forex, most pairs. In reserve accumulated wealth, in so many areas, the USD is already out there. It's still king.

(The funniest thing I hear is that the USD has no 'real power or value'. That's strange. Just bought new computer equipment with it, lol)

[InformedTrades]

Hey Airelon,  Good to have you back hope the VK was good I know it was well deserved. Best Regards, Dave

[AirelonTrading]

Thanks Dave. Yeah, the vacation was fantastic. I prefer the more 'local' type vacation, rather than the 'resort' vacations. If you enjoy vacations that take you to the local scene - I highly recommend Queretaro, Mexico. It amazed me how much the economy of that area has improved - in just one years time.

I could tell it was a good vacation, as when I got back, I felt refreshed, and ready to go. Nothing worse than coming back, and feeling drained.

[InformedTrades]

yeh I am with you on the local type of VK's definitely like to go places that I feel are truely different from what I am used to. Will have to check out Queretaro have actually never heard of it so it sounds like just my type of place. Best, Dave

[daveho77]

1) $1 today is worth about .03 in 1913. 2) Historically speaking fiat currencies end with the gov (or in our case, B-2 Ben) hyperinflating and creating too much of it. 3) What "if" the more countries like Iran stops taking dollars for their crude?

These are just a few things I think about when I think of the USD. For now I will buy more gold and silver, time will tell which is worth more down the road.

[AirelonTrading]

And where is that gold traded? On an exchange, that's tied to the U.S. Gold is getting traded up ON the USD. So when those people take their profits on the Comex - what does it get converted to?

USD

[InformedTrades]

Hi Daveho77, Thanks for the comment. These are all points worthy of discussion which I am glad to see has started here. Best Regards, Dave

[daveho77]

Airelon, your dollar may still have buying power when it comes to computers, cell phones, and flat screen tvs. Funny thing is I notice my USD doesn't get me as much FOOD and GAS as it used to. If only I can eat computers I'd be in good shape.

[AirelonTrading]

Tis inflation. I've known for a while that it's coming, and have been talking about it. And is very cyclical. Every 30 years or so, we get hit with it hard. Not too hard. Last time, it got to the teens %'s, for months on end. I remember the last time. Dad fed us out of the garden. Then we recovered. We recovered because everything is tied back to the USD.

[CarltonY]

Inflation cyclical? You've known for a while that it's been coming? You seem like quite the prophet... Inflation has been a part of currency for many centuries past. Yes every 30 years we seem to notice it more because the government kicks up the printing press to finance wars. But sometimes things are not as they seem.

[CarltonY]

Inflation statistics (along with GDP and Unemployment) are taken to the basement and beaten up with tools like product substitution, geometric weighting, hedonic adjustments, until they look nice enough to present to the public. Now I'm not saying inflation is a bad thing. I personally think that 1-2% inflation is healthy for a growing economy.

[CarltonY]

I believe that control of monetary policy should be put in the hands of the people so that we can keep statistics transparent and not have to rely on a small group of men to guide us in our best interests.

[AirelonTrading]

If you check out my videos for the last 3 months, I've been talking about the inflation - we now see.

There is a very specific reason why they are weighted as to the way they are. If they weren't, it would be nearly impossible for me as a trader and investor to measure how much producers (PPI #'s) are holding back costs from the consumer (CPI #'s), and from what areas. If it was not split as it is, it'd be near impossible for me to tell where the inflation is occuring

[AirelonTrading]

And we do have a voice. It's the dollars from our pockets, and where we put them. If anyone truly believes that the USD is done, they are allowed to buy foreign currencies (Something I'm also not against) and metals, and store them in foreign banks. That's the voice we all have.

[daveho77]

By the way, I love the "Cliffs of Dover" cover under your favorites. I've been learning that song since I was 12 and I still can't play it that perfectly. After I watched the cover on your page I think I"m going to give it another try. Excellent song though!

[KARStarla]

This is what I been wondering, because I dont know how and I want to know. How can I buy other currencies and store them in foreign banks without having to go to the foreign banks? Can that be done? Since I never did anything like that before I'm sorta warry. How would that help me if I'm broke in America with foreign money in another country?

I guess you can tell I'm green here, I havent a clue

[AirelonTrading]

You do it through a Swiss Introducing Broker, you need a passport and some other paperwork, and probably about $10,000. To answer you other question - if you're broke in the U.S., that money really won't help you in day to day living. It's a way to increase your wealth / assets.

[KARStarla]

This is hopeless the more you work the less power your money has. Its like trying to run up an esculator that runs faster downward.

this stinks, I dont have $10,000 anyway

[daveho77]

based on 1983 criteria of calculating CPI we're at about 12%. The difference between Volker and Greenspan/Bernanke is 20% interest rates vs 2%. And when I said I would buy gold and silver I mean physical gold and silver, ones I can trade in for any currency out there, I can even trade it for food or a boat ride off the continent.

[CarltonY]

One of the main reasons countries still hold USD as reserves is because we threaten them with our military might. A forced contract. Does that sound like a free market? Sooner or later the market will work to unwind the contract, whether it be peaceful or not.