5-28-21 Will the Dollar Lose Its Reserve Currency Status?

Nearing Midnight: Will the Dollar Lose Its Reserve Currency Status? – Todd Strandberg - https://www.raptureready.com/category/nearing-midnight/ The U.S. has a very special and privileged relationship with the rest of the world. We control the reserve currency that 85% of all trades are conducted with. This puts us into a position where foreign nations send us goods and we send them dollars. The one thing the dollar has going for it is that there is so much of it in the world, it can be used for large transactions. If a nation is going to buy $3 billion of oil from Saudi Arabia, it’s not going to use Russian rubles. As the supply of dollars soars into the tens of trillions, people are starting to worry about the number of dollars in the system. When we were on the gold standard, global trade remained largely balanced. If a nation imported too many goods, the value of its currency would decline as gold left the country. America had a surplus in its trade with the world. It built a horde of gold of 22,000 tons. When it began spending too much money on imports, our reserve of gold dwindled to $8,000 tons. When Nixon closed the “gold window” on the convertibility of dollars into gold, the U.S. government was free to print all the dollars it needed to fund America’s financial deficits. Many nations realize that they are getting the short end of a bad deal, but nobody can think of a better system. The Chinese tried to get the world to use its currency, the Renminbi. President XI traveled the world, signing one trade agreement after another. Nothing happened because the Renminbi doesn’t freely float exchange markets. People can’t trust a currency that they don’t know what its true value is. The imbalance in trade between the U.S. and the world has become so extreme, something will have to change in the coming years. In 1987 the U.S. had a monthly trade deficit of $17 billion, which helped lead to the stock crash of that year. Today we have a trade deficit of nearly $100 billion a month, and most people on Wall Street have no concern. The Ford Motor Company recently reported low earnings because it could not get the microchips needed to produce many of its vehicles. It had an 18% decline in sales. Since these chips almost solely come from Taiwan, the lack of them should be a wake-up call for Detroit to have a more redundant supply chain. General Motors has the same problem with the lack of chips. The company said it was building some full-size pickup trucks without software that helps manage fuel consumption, reducing miles per gallon. “By taking this measure, we are better able to meet the strong customer and dealer demand for our full-size trucks,” a spokeswoman said. What is truly amazing is how much food we import. Many companies import apple juice from nations like Turkey and Poland. I looked at my bottle of olive oil, and it said the country of origin could be Argentina, Greece, Italy, Tunisia, or Spain. America is surrounded by three bodies of water, and yet we import 75% of our shrimp. We don’t seem to mind that food standards are lacking in some of these nations. Many farmers mix their olive oil with peanut oil or use oil that is rancid. We don’t care as long it’s cheaper than oil produced here in America. I can only wonder what would happen to America if the world woke up and started selling the horde of dollars they’ve accumulated. If the value of the dollar declined, we’d still need to import goods. With the dollar dropping, we’d need to spend more dollars to get the same amount of products. If the dollar crashes, we will have to start producing goods here at home. It would take a very long time to build a factory that could make microchips. Many of the components needed to manufacture the chips are produced in other nations. We have become so dependent on other nations for even the simplest product, I doubt I’ll live to see America return to its greatness. I firmly believe that when God calls His church home, America is going to implode. The loss of millions of people would be reason enough for a financial meltdown. Every time I write about America’s economic problems, I can only conclude that God’s restraining hand is the only way that such a profligate nation could avoid total collapse. “For God hath not appointed us to wrath, but to obtain salvation by our Lord Jesus Christ” (1 Thessalonians 5:9).