The Collapse Of The US Dollar and The Effects It Has On Your Money

By: Dominick Edwards

First the currency collapses losing all value

Second the stock market will crash Third the banks will collapse which means your life savings will disappear And from there it is just downhill for everyone

$ The dollar loses value (Has been for years) $ The dollar stops being used for international trade $ No countries want to trade for dollars

$ Now the dollar has lost all buying value

$ All international trading on the stock market ceases $ This leads to the crash of the stock market

$ Without money being traded on the stock market there is no need for a bank

$ With the dollar having no value, people are trying to exchange their dollars for another currency $ People are withdrawing their money from banks to try and purchase tangible goods that can be traded

$ Money in the bank is useless $ Money in your pocket is useless $ Stores runs out of goods from people getting everything they can to trade with $ Gas runs out because we dont have the funds to purchase more and have it brought in

When our currency drops in value in relation to others, it makes goods produced in the US cheaper in foreign markets. And products made overseas, including oil, become more expensive for Americans to purchase.

When the dollar loses its value, it makes our goods produced cheaper which means our exports increase. On the other hand that means goods produced overseas become more expensive for us and our imports decrease. Which means we cant afford to buy the imports we are used to buying. Oil being the largest import and almost all oil is sold in dollars.

The belief is that foreigners have no place other than the US to safely store their money, so they will put up with all sorts of financial injustices. And so far they have, except that the Chinese holders of nearly $1.3 trillion in our governments debt have been openly questioning the wisdom of investing in the US.

Why is the dollar still holding value? Other countries dont have a safer place to store their money. Many smaller countries who dont have their own currency or their currency isnt widely traded for, use the dollar for trading purposes. If all these countries would drop the dollar and start using another form of currency it could cripple the US.

What Is The World Reserve Currency?

Who holds the largest part of the World Reserve Currency?

Currently the US dollar holds the largest percent of the world reserve currency at over 60%. The euro is the second largest at over 25%. Could that change? Yes it is possible. The Chinese yuan is on a big rise now becoming the second highest traded currency. There is a CNBC report that came out Feb. 26, 2014, Yuan to supersede dollar as top reserve currency: Survey, it was a vote taken and 53% believe that the yuan will overtake the dollar as the largest reserve currency

What is a US Treasury Security?

It is a bill, note or bond that is US government debt. When a country buys a treasury security they are lending money to the US government which is to be repaid over a period of time. China holds $1.28 trillion and Japan holds $1.14 trillion in US treasury securities. It is the safest investment and considered to have no risk meaning you will be repaid interest and principle on time.

If the US dollar collapses, is there a new form of currency set to replace the dollar?

As for now there is only speculation of a new currency. There are two forms of currency that are being talked about. One is the Amero which is currency meant for a union between the US, Canada and Mexico. The other is Bitcoin, which is an online form of money. Bitcoin has had its share of misfortune lately with Mt. Gox, the largest bitcoin exchange, collapsing last month. Or as Boston University finance expert Mark T. Williams told state regulators in New York last month, Bitcoin is an experiment that needs to remain in the laboratory until it can meet the basic standards required to become a beneficial transaction currency."

The dollars decline over the past 30 years has been far greater than most Americans realize. It has lost almost half its value against other major currencies since 1985 and is down 33% in the past 11 years alone. Indeed, the value of the U.S. dollar is lower today than it was in 2009 when the recession ended

The value of the dollar has been steadily decreasing, but the value can fluctuate. It could take decades or months for the value to become so low that no other country wants to trade in dollars. On the other hand in the same amount of time the value could rise causing all countries to want to trade in dollars again. This is one of those topics that you could argue either way and still not have a definite answer. Just because the value of the dollar is down it doesnt mean the dollar will collapse.

Will A Collapse Happen?