The US Dollar Will Collapse At Some Point in The Near Future.

The value of the United States dollar will plummet at some time in the not-too-distant future. Not only will this be a catastrophe for the United States of America, but it will also be a catastrophe for the rest of the globe.

In comparison to the value of the United States dollar, a large number of other countries’ currencies, including those of India, Malaysia, Europe, Taiwan, and China, have depreciated. However, the value of Sri Lanka’s currency has dropped by more than 70 percent.

A devaluation, on the other hand, poses the greatest threat of all, which is a rise in the cost of imports. Price rises are possible for all types of imported commodities, including completed items, intermediate goods, and raw materials. The rates of domestic inflation will rise as a result of this, moreover, increase the cost of manufactured exports from major producing factories throughout the World

What factors led to an increase in the value of the US dollar?

Keep in mind that the United States of America and the United Kingdom are the true proxy holders in this conflict that is taking place in Ukraine. Approximately 20,000 Ukrainian soldiers are currently undergoing training in Kent, England, while thousands of American soldiers are stationed in adjacent countries such as Poland and Romania in preparation for possible deployment.

Nevertheless, neither Putin nor Biden nor NATO are making progress toward their objectives.

They made an effort to deplete some weapons in Russia, but it turns out that the United States is running out of weapons to send to Ukraine, and NATO is holding back, with only a few countries such as Germany and Poland attempting to clear some of their old stockpiles, but the majority of them have been destroyed even before reaching the battleground.

Bear in mind that the fighting in Ukraine does not constitute a full-scale war. Despite the fact that there is destruction, the intensity of the conflict is not very high. Russia still has a 60% weapon reserve, and during the previous strike on Kiyv, they used less than 3% of its SU-300 missile arsenal. In addition, Russia has a large number of other types of weapons.

According to a report that was made public by the Ukrainian Ministry of Defense at the beginning of September, Russia possesses a stockpile of at least 7,000 missiles with a similar long range and a few thousand missiles with a shorter range. Since the beginning of October, Russia has launched approximately 200 different combinations of drones and missiles, most recently into Kiyv; as a result, several reports have been prompted to discuss their inventory.

It would appear that Russia has exhausted or destroyed a significant portion of their tanks ,fighter jets , helicopters , light support equipment, artillery, and ammunition ,but the Russian has already in solution in place

There is some news that has not been publicized, and that is the fact that during the Russian government’s effort to mobilize 300,000 troops, a significant component of this exercise was to inject billion into Russia’s weapon manufacturing plants, as Putin had requested. The media projected that Russia lacked manpower and needed urgent enlistment of troops; however, this was only half true. Putin injected billions of ruble into all of the weapon production factories to produce new tanks and artillery running 24 hours a day. Additionally, a significant portion of the enlistment was also sent in as additional labor to the factories.

Russia had increased with daily attacks on Ukraine ‘s cities , and just recently an additional 10,000 Russian troops have been deployed for combat with some heading to Belarus , preparing for the next occupation towards Kiyv .

Although most media, has highlighted major victories of Ukraine in some states after the annexation exercise of the four Ukraine states into Russia ,it was only after the Kerch Bridge (the Crimean Bridge) was attacked did the Russians retaliate with 84 missile strikes and artillery barrages all along the front lines and into Kiyv.

From general overview, it would appear that Putin is willing to continue the battle into the winter. This already provide a clear guide to DXY dealers ,as recently ,they have witness how the US dollars has escalate due to this conflict and all the sanction and energy crisis that brought favors to make the US dollar stronger

Therefore, the conflict between Russia and Ukraine has a direct effect on the value of the U.S. dollar, which has increased in value thanks to quantitative easing and a rise in interest rates brought on by the energy crisis, which was largely caused by sanctions the U.S. put on Russiaall under the hawkish stringent control by the US federal reserve, and they seems eager to push the whole process through until 2024

After noting that the fight would continue into 2023 and beyond, it is probable that a later U-turn will only be possible if the Democrats are unable to retain control of the Senate and the majority of seats in the coming next election, which will take place in 2024.

It is probable that this will take place in the not too distant future, but the outcomes of the election that will take place on November 8, 2022 will provide some guidance for the value of the US dollar, as the Dems may lose the house during the Mid Election 2022 and by first quarters , if the senate and parties host representative has been changed, the ruling administration may have a white house run by white Elephants, subjective if the the Dems lost in the election struggle challenge

Even if we recognized that the process of de-dollarization had begun, no one seems to have noticed that the BRICS financial system may be dedicated to the process of devaluing the American dollar.

The acronym BRIC refers to the countries of Brazil, Russia, India, and China. China is the only one that appears to be doing well. The remaining companies are not really competitors. Having become dependent on an export bubble for the purpose of maintaining domestic growth, China is currently in a predicament that is somewhat analogous to Japan during the 1980s.

They have become dependent on a steady stream of foreign cash flowing in over the last 30 years, and a deflating US dollar would make their single largest market less able to afford the products they desperately need to sell. Over the course of many years, official government policy has endeavored, with only a modicum of success, to raise the level of domestic consumption.

China and Japan each hold around the same proportion of US government debt, which normally floats around 20%. However, while Japan has been gradually reducing their share from a high of approximately 28% in the late 1990s, China has been gradually increasing their consumption over the years.

Brazil actually maintains the third greatest position in US foreign debt at the present time and the majority of the remaining debt is held by other major G7 countries and well-known banking centers such as the Cayman Islands and others .

However, despite their size, large populations, and growing power, Brazil and India are still considered to be minnows in the global finance industry. Russia, on the other hand, is a hollow bankrupt shell that is only kept afloat by the export of oil and gas; none of these countries have sufficient capital under control to affect the value of the US dollar over the long term.

Naturally, in addition to this, in the absence of any context for a deliberate economic attack, many other worldwide global finance powers, such as Japan, the United Kingdom, and Germany, as well as national sovereign wealth funds, such as Norway’s or Saudi Arabia’s, would probably act in opposition to any ‘deliberate’ attempt to hammer down the United States dollar. This would be done both for political reasons and for their own economic gain, if there are profits to be made betting against it.

The fact that the United States dollar is a de facto world reserve currency, which means that many countries, major corporations, foreign banks, and wealthy individuals around the world hold reserves of it — large amounts of cash — Because of this, a very large number of people around the world have a vested interest in seeing that the dollar continues to maintain its stability. Because of this, it is far more difficult for any one organization to meddle with it, or even to do so in a concerted attempt without the participation of a large number of different groups.

Be conscious of the fact that they are not making an effort to lower their currency in relation to the US Dollar but rather are diversifying away from the US Dollar. Their De-dollarization attempt is to devalue the US dollar in the years to come

Why?

Quantitative easing has been weaponized and used against the dollar.

Both of these problems pose a threat to the value of the dollar. If you are a country located outside of the United States, you should endeavor to limit your exposure to the risks that are presented here.

This indicates that a number of nations, including those that make up BRICS, are attempting to devise a monetary system that is a substitute for the US dollar.

This will, over time, have the effect of lowering demand for the dollar, while simultaneously maintaining or increasing supply.

On the other hand, it is anticipated that the budget deficit in the United States would continue to widen.

The ratio of the deficit to the budget has averaged 3.5% every year for the preceding 50 years, but it has increased to 6.7% from 2009 through 2021. This information comes from the Congressional Budget Office who forecasts that the unemployment rate would rise to 7.1% in 2033, from its current level of 3.9% in this year. As a consequence of this, it is quite probable that the annual budget deficit in the United States will average 5.5% of GDP during the next ten years.

The United States may be headed in the wrong direction even in terms of the money generated through investments. Investment income has been beneficial for the United States so far, despite the fact that the country is the largest debtor nation in the world . This is the case for a variety of reasons, including the strong returns on outward foreign direct investment and the vast sums of low-cost foreign investment that are held in US Treasuries and bonds (on the liability side).The USD are not peg vastly against value metals, but very much on its reputation as the World leader and its freewill capability to Print Money

On the basis of the historical performance of the United States, it is reasonable to conclude that the revenue from investments amounts for around one percent of GDP. The United States, on the other hand, has done a tremendous amount of damage to its own financial credibility in recent months. This is likely to be a factor that contributes to a drop in the investment income of the company.

In conclusion, there is the matter of economic growth, which is still another domain in which the United States may have difficulty in the not too distant future.

Over the course of the following decade, it is anticipated that annual growth in the United States will average close to 2%. If we take into account the other assumptions presented before, it follows that the level of the United States’ external debt could approach one hundred percent of the country’s GDP within the next few years.

The persistent buying of US government bonds and Treasury bills by the central banks of Asian countries and oil-exporting nations helped the United States escape a balance-of-payments and dollar crisis in the past. This was one of the primary reasons. However, as geopolitical tensions continue to escalate, these buyers may either elect to alter their views or be compelled to change their opinions.

The Federal Reserve is currently pursuing aggressive interest rate hikes and quantitative tightening in response to the current environment.

However, an increased demand for foreign money to finance the trade deficit, coupled with an increased unwillingness on the part of foreign investors to acquire US government bonds and treasuries, might put the United States in a position where it is unable to meet its financial obligations.

It is possible for it to either control inflation or keep the economy steady from the outside, but it cannot do both at the same time, unless the growth of GDP in the US significantly slows down.

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