The Devaluation of the dollar has been happening for the last 70 years or so, especially after 1971. The devaluation of the dollar is a monetary phenomenon and typically driven by lowering interest rates by the federal reserve to increase credit and liquidity. From the moment of the launch of quantitative easing (QE), worried investors have asked, will the U.S. dollar collapse? There are some probable scenarios that might cause a precipitous crisis for the dollar. The most authentic is the dual-threat of high inflation and high debt, a scenario in which increasing consumer prices force the Fed to raise interest rates sharply. Much of the national debt is made up of relatively short-term instruments, so a spike in rates would act like an adjustable-rate mortgage after the teaser period ends. If the U.S. government struggled to afford its interest payments, foreign creditors could dump the dollar and trigger a collapse. A reset means the banksters will have to increase the price of the gold. They own tons of it so that they can cover their derivative positions … This reset is needed to hinder the most significant and fastest increase in global debt in half a century from exploding … But for the average middle-class family or pensioner on Social Security, it will mean “huge inflation”… As the reset will imply “an exponential increase in the quantity of money” by the Fed (meaning high inflation in the prices of everything) … Excluding for maybe “some food items” that are subsidized by the government to impede people “with pensions linked to the chained CPI” from literally starving!!
If you were worried about the debt of U.S.A then hold on to your heart because the figure for global debt is even more alarming. In a report issued by the Institute of International Finance in November last year the global debt hit a new high of over $250 trillion for the first half of 2019! According to the report, China and the US were two of the biggest contributors to global debt. The IIF said the overall number hit $250.9 trillion at the end of this period, and will exceed $255 trillion by the end of 2019.
The report stated,
“China and the U.S. accounted for over 60% of the increase.With few signs of slowdown in the pace of debt accumulation, we estimate that global debt will surpass $255 trillion this year,” the IIF said in the report.
The graph shown above shows the accumulation of global debt, it was around $100 trillion in 1999 and 2 decades later it is close to $300 trillion. Rising debt across the world has been a big concern for investors and has also been flagged as the next breaking point by a number of economists. Record-low interest rates make it extremely easy for corporates and sovereigns to borrow more money.
The IMF also warned at the end of 2019 that almost 40%, or around $19 trillion, of the corporate debt in major economies such as the U.S., China, Japan, Germany, Britain, France, Italy and Spain was at risk of default in the event of another global economic downturn.
The IIF cites the deepening of global bond markets as the reason for the rise in debt levels. The global bond markets increased from $87 trillion in 2009 to over $115 trillion in mid-2019.
The coming economic collapse will be caused by rising debt levels. As the U.S debt tops $23 trillion dollar, the overheated economy is indicating the upcoming stock market crash that will make the 2008 financial crisis look small in comparison.
In this video, we will look at how the debt of United States has reached $23 trillion dollar in less than a century and how the rapidly rising debt levels have all the potential to be the trigger for the next big economic collapse. In order to understand the next dollar collapse, we need to understand the reasons that have caused economic collapse in the past, most importantly the stock market crash of 2008 because it is the closest example we have got of a financial crisis caused by modern day economic principles and financial products.
One of the major causes of the 2008 stock market crash was the default of sub prime mortgages, the housing sector collapsed and that triggered a chain reaction that quickly took down major financial institutions. It has been almost a decade since 2008 and global debt levels have sky rocketed, the debt of U.S has grown at the rate of almost $1 trillion dollar in the last few years and this no longer seems like a sustainable model to run the economy.
However in order to try and make some preventive and corrective actions to save the U.S economy, we need to understand the cause of the problem first and this video explains exactly how and why the U.S debt has risen so much that it has become the monster that will take this whole system down with it with a dollar collapse.