Vladimir Putin on US Dollar Destruction
As I’m sure most of you already know, Tucker Carlson’s lengthy interview with Russian President, Vladmir Putin aired last week. They discussed a number topics but one of Putin’s comments particularly stood out to me. It was dealing with the US dollar…
To me, this is one of the most important points that he made, but it’s one that likely went over most Americans’ heads.
I want to breakdown his comments and explain what he means and what he’s predicting.
America derives its global power from the US dollar being the world reserve currency (check out one of my older writings as a primer where I explain the history of the USD’s power - American Nationalists vs The Banking Class)
The USD is the most stable currency backed by largest military, most stable economy, wealthiest nation, etc. The dollar is also required in the vast majority of global trade deals.
Because of this, every country wants dollars to stabilize their local currency and domestic economy, transact globally.
For decades, the USD has been a neutral asset - which it should be as the reserve currency of the world. It shouldn’t be turned off to certain countries due to political differences or used as incentive for an agenda.
But in 2022, that all changed when Russia was kicked off the dollar-transacting system (SWIFT) and billions of dollars worth of assets were instantly frozen. This sent shockwaves through global governments. The US is wielding too much power and can ruin economies overnight. Anyone could be next…
Since then, we’ve seen applications to join BRICS+ explode (new members include: Iran and Saudi Arabia). One of the priorities of BRICS+ is create a parallel global economy and currency that doesn’t rely solely on the US and is truly neutral.
Putin also notes that the US “can’t stop printing.”
For a while, the US was able to get by with excess money printing and relatively low inflation (when compared to other countries who also debase their currency).
This is because the dollars being printed always found a home - in many cases, overseas. In a way, we’re able to export inflation to other countries. If we print 1 trillion dollars and half of them wind up in the reserves of other countries, now only 500M new dollars are being spent/used domestically.
The reserve status is the only reason we haven't experienced extreme levels of inflation that should have been caused by "quantitative easing."
But as Putin notes, many countries globally are now decreasing the amount of US dollars they hold.
If the dollar is no longer the world's reserve currency those dollars in other countries would flood back into the US leading to hyperinflation.
Too much money chasing too few goods. It would be a collapse of our economy.
Not only is the US dollar the reserve currency being used in most global transactions, but US Treasury bonds are the world’s reserve asset. Foreign governments purchase US Treasuries (bonds issued by the US government) to store dollars, collect interest, hold stable assets.
But this is also changing…rapidly.
Stick around for the premium portion of this article where I’ll explain what this will lead to, what it means for stock prices and how you can make a significant amount of money.