It’s Over: China JUST Broke The US Dollar - The Harsh Facts.

boy there has been a lot of fear about

the US dollar losing its Reserve

currency status and there are many

reasons for this but today we're gonna

break down a Wells Fargo piece on

exactly what's to come for the US dollar

and what's left in terms of the strength

of the US dollar after all we're hearing

rumors that Russia at least at some

point in the past has been in talks with

Brazil and India and China about

creating a brics currency although that

was probably a revived rumor since

before the Ukraine Invasion so it's

probably meaningless we've talked about

China negotiating deals between Iran and

Saudi Arabia once Arch enemies we've

talked about the US's botched withdrawal

from Afghanistan leading to much fewer

uh trust and Reliance in the American

government given the power vacuum

they've left in the Middle East and also

potentially the United States is failure

to actually approach appropriately

appropriate Aid in the Middle East and

Africa for example why did Egypt just

consider sending rockets and missiles

made potentially with U.S dollars given

that we've given them over two and a

half billion dollars over the last four

years to Russia why was that even a

consideration now we've gone a a civil

war essentially in the uh North uh East

country in Africa of Sudan uh the Darfur

regions fighting again and once again

countries are calling the United States

but what's the United States doing

pretty much nothing now this isn't to

say that the United States should be the

world police but it is to say that the

less countries can rely on the United

States the more they start doing things

like trading natural gas in Chinese Yuan

instead of dollars and that's exactly

what Saudi Arabia just did they started

settling some natural gas contracts in

Yuan Renminbi in China instead of the US

dollar and it's leading a lot of folks

to wonder at the same time as the US

dollar is falling oh crap what if the

dollar loses its status as the world's

Reserve currency well what's first worth

understanding is why the dollar is

falling the dollar first of all it has

fallen when we look at a six-month chart

pretty pretty nicely here okay we're

down from about 112 on the Dixie down to

about 101. go out about a year and uh

you could see this peak of the dollar

somewhere around October where we were

somewhere around 112 and so we've been

on this disinflation path if you will uh

for the dollar now why potentially is

the dollar falling at the same time as

all of these International concerns are

propping up we'll explain exactly why

the dollar is falling but first I want

to look at is the dollar going to go

away as other countries start talking

about getting rid of the dollar and the

reality is well outlined by Wells Fargo

and if we understand Wells Fargo and

then we explain why the dollar is

falling all of a sudden there's a real

chance your fears around the US dollar

imploding and going away will also

implode and go away that is your fears

will go away so let's talk about what

the Wells Fargo has to say about the US

dollar status as its Reserve as a

reserve currency of the world I do also

have to mention that tomorrow is 4 20

and we are going to get rid of the

lowest options to join the programs on

building your wealth we're probably

going to get rid of the lifetime access

into single courses after 420 so we've

got a flash sale going on right now if

you like my perspectives consider using

that 420 coupon code link down below

today tomorrow flash sale on that and

then the net prices to get in will be

going up you get course member live

streams on building your wealth and

perspectives from going to zero to

millionaire in real estate stocks or

otherwise so what do we have over here

Wells Fargo in recent weeks the US

dollar status as the world's Global

Reserve currency has come under intense

scrutiny with some analysts predicting

the demise of the greenback's Reign such

speculation has occurred in the context

of China and Brazil announcing clearing

Arrangements and other information that

we've just uh sorry I almost had a

sneeze there because all this fear

is there we go okay so how does

Wells Fargo counter some of this let's

look at these charts first of all Wells

Fargo suggests here's foreign exchange

turnover by currency and you could see

that us uh dollars make up

88.4 of all of the US or all of the

international turnovers that occurred

now keep in mind this is out of

200 percent because there are two sides

to each uh uh equation right so you have

to think about it as uh when you add all

this up you're going to get 200 because

you have two sides but the point is

you've got almost 50 essentially when

you look at it that way of All Foreign

Exchange turnover conducted in U.S

dollars part of the reason for that is

US Dollars don't have convertibility

issues you don't have government risk

and even though it's Fiat it's the most

trusted Fiat that exists I know a lot of

people especially those in the crypto

Community don't like Fiat and they'd

love to see the dollar die and a lot of

people are suggesting what Bitcoins

going up because of the weakness of the

US dollar for the weakness of the US

dollar we could have seen coming from a

mile away this reason I had started to

short the dollar and again I'll explain

that reason in just a moment but what do

we see when we look at these charts FX

turnover by currency the US dollar

Reigns substantially Supreme the second

closest currency by for Global Payments

is the Euro not the uh British pound the

Japanese Yen the Chinese Yuan these

don't even hold a candle to foreign

transactions that's just one of the

facts beyond that what do we have here

Reserve managers continue to choose the

dollar the US dollar still represents

the majority of global Reserve assets

that is when people or countries want to

maintain a currency or bonds they prefer

the dollar

now why would they prefer the dollar

well one of the reasons they prefer the

dollar in fact we've got a breakdown

right here one of the reasons they

prefer the dollar over the Japanese yen

is because Japan is distorting their

bond market thanks to yield curve

controls and they're freaking out

markets so that's an unstable Bond

Europe is concerned about fragmentation

between the value of bonds between uh

basically France Germany Italy Spain

which is basically saying you've got the

really strong economies in Europe

potentially fragmenting the yields on

their bonds versus the poor countries in

Europe like Italy and Spain versus

France and Germany

then in China you've got too many

capital controls creating disincentives

for Reserve managers to actually

allocate to Chinese bonds now even

though the Chinese yuan is paid to the

US dollar it's still not desirable

because now if you use the Chinese Yuan

you're having to deal with the Chinese

government instead of the US government

and look I'm not here to show the US

government just saying it's the least

bad out of all of the other options and

so there's no surprise when we look at

the US dollar it is super supreme in the

International Community but beyond that

you have to understand people keep

talking about the Petro dollar going

away the Petro dollar is basically oil

traded in uh in dollars the Petro dollar

market sits at around four trillion

dollars that's pretty big right but

there's some the the foreign use of

American dollars sits closer to 12

trillion dollars in total so outside

just oil dollars so really even just the

Petro dollar alone if a hundred percent

of it went away it just represents a

third of international use of dollars or

Holdings of US dollars

and what's wild about this though is it

probably in my opinion going to take 30

years for the US dollar to no longer be

used in oil settlements and guess what

we probably won't be trading in 30 years

oil or at least not as much as as we do

today is hopefully our world wakes up to

the beauty of nuclear clean energy uh

over you know some of the solar and wind

although solar and wind is probably

strong enough to help I'd much prefer it

heavily relies on Battery Technology I'd

heavily prefer investing more in nuclear

power but that's going to take a while

it's been a little unpopular thanks to

Fukushima but that's really a topic for

a different video so if the dollar is so

strong then why is the dollar falling

Kevin I mean we just explained why the

dollar is so fantastic and so wonderful

then why is the dollar falling in value

it's very simple there's one very simple

explanation for why the dollar is

falling it's super easy and it all has

to do with

inflation expectations as inflation

expectations go down and the United

States doesn't suffer from Runaway

inflation what ends up happening well

you end up seeing yields on treasuries

fall when you see yields on treasuries

Fall as they have been over the last uh

six months what you end up getting is

less demand for U.S dollars because

think about it the 10-year treasury in

October November was trading for

somewhere as high as 4.25 percent look

at this six month chart right here on

CNBC this is a six-month chart of

10-year treasuries the downtrend is

super clear and the downtrend actually

corresponds directly to the downtrend in

the US dollar

so you look at the peak of the US dollar

right there in October right over here

right peak of the US dollar holy moly

you got a peek over here let's just go

to year one year on both of them go to

one year on both of them and what do you

see Peak treasury yields right here

basically aligning with Peak dala

everybody wants the dollar when the

10-year treasury is offering you 4.2

percent

but as inflation concerns have started

to become transitory transitory is

obviously a very offensive word uh you

know the Federal Reserve made plenty of

mistakes still printing money while

inflation was too high there's no

defending the Federal Reserve on that

but inflation will very likely end up

proving to be transitory over a span of

two three years which is a lot longer

than the Federal Reserve expected but

the point is as inflation continues to

prove that we're actually trending

towards disinflation maybe even

deflation

well then treasure yields fall now

treasury yields did go into a little bit

more of a hole here because of the

banking crisis but the trend is clearly

down from 4.2 to 4.6 percent uh just

like the trend is down on the U.S dollar

so now what's really easy to do though

and this is where you have to understand

politics ready for this this is this is

my favorite thing to mention

let's get serious about this one my

favorite thing to mention

is that

you have a democratically controlled

White House

and what do Republicans hate

a democratically controlled White House

Republicans also dislike the United

States's performance in many different

regards to the presidency specifically

in regards to the Middle East

and so what is a beautiful thing that

you can do if you're a Republican or

your Fox News

you could basically say oh my God the

dollar is plummeting the dollars lost 15

percent of its value from Peak at the

same time China's starting to negotiate

natural gas currency transactions or

natural gas transactions in Renminbi

instead of US Dollars that's it we're

losing our clout it's all because of Joe

Biden's withdrawal from Afghanistan and

our weakness in the Middle East

and yeah don't get me wrong I personally

think the Middle East is a show and

we've made some really big mistakes in

the Middle East and some big mistakes

with our foreign policy I'm not arguing

that at all I'm simply saying it's

awfully convenient that as inflation is

going down the dollar is falling and

it's easy to ignore the inflation side

of the equation and just say dollar

falling Biden sucks hell yeah let's pop

a beer but not a Bud Light

so anyway look this whole dollar D

dollarization stuff is a bunch of

hogwash if I could short the idea that

the dollar is going to lose its Global

Reserve currency I'd probably put a

million bucks on it because it's

complete nonsense it's not happening

anytime soon even if the petrol dollar

went away it doesn't matter and the rest

of it is just politics that's what it is

and that's what you should be

considering it as so when it comes to

Dollar dollarization don't worry about

it check out the courses instead

[Music]

thank you