10 reasons why the dollar is about to end as the world’s reserve currency
Of the foreign exchange reserves in the world, 60% are in United States (US) dollars. The largest economies are creating agreements to stop using US dollars for international trade. This change will cause huge negative problems for American citizens.
The second largest economy in the world is China. Its fast-growing economy is predicted to outpace the US economy by 2015-2016.
10 reasons why the dollar is about to end as the world’s reserve currency
#1: Japan and China will use their own currencies in trade
In 2013, the world’s second largest economy (China) and the world’s third largest economy (Japan) reached an agreement to use their own currencies (instead of US dollars) to trade with each other. The American media completely ignored this very important agreement.
#2: The BRICS plan to use their own currencies to trade with each other
According to a statement from an Indian news source.
“The five emerging economies of the BRICS (Brazil, Russia, India, China and South Africa) signed two pacts to promote intra-BRICS trade… The agreements will enable credit facilities in local currency for companies from BRICS countries. The BRICS trade which has grown rapidly at a rate of 28% over the last 5 years, but is still well below the full potential of the five economic powers”.
#3: Russia and China use their own currencies for trade
For more than a year, Russia and China have used their own currencies to settle trades with each other, instead of settling trades in US dollars as has been done for decades. It is important for investors to know this as they can make a profit on foreign exchange when trading correctly.
#4: Use of Chinese currency grows in Africa
Africa’s largest trading partner since 2009 was China. Meanwhile, China is seeking to encourage the use of Chinese currency in Africa by buying partnerships in existing mines and businesses.
Africa’s largest bank stated:
“We expect at least $100 billion (about 768 billion rand) in Sino-African trade… to be settled in renminbi by 2015.” (the renminbi is the Chinese dollar-the Yuan).
#5: The United Arab Emirates (UAE) and China will use their own currencies in trade
The United Arab Emirates agreed with China get rid of the us dollar and start using the currencies of their own countries to settle oil transactions. This increases the threat to the petrodollar system even though the UAE is not a big country.
#6: India buys oil from Iran with gold
Iran has been one of the nation’s leaders in charging to stop using the US dollar for international trade. India is now reportedly using gold to pay for Iran’s oil.
#7: Saudi Arabia is likely to abandon the use of petrodollars for deals with China
China is the largest importer of oil from Saudi Arabia! A huge oil refinery is being built in Saudi Arabia through an agreement between China and Saudi Arabia. Given that China is its first customer, how long will Saudi Arabia hold out with the petrodollar? Not long, most analysts predict.
#8: The United Nations (UN) promotes a new world reserve currency
The United Nations has called for a replacement for the US dollar as the world’s reserve currency. A key UN report envisions “a new global reserve system…no longer reliant on the US dollar as the main reserve currency.”
#9: The IMF Proposes a New World Currency to Replace the US Dollar and Other Currencies!
The International Monetary Fund (IMF) published a report calling for a new international currency to replace the US dollar. The report entitled “Reserve Accumulation and International Monetary Stability” went so far as to propose that the name “Bancor” be the name of the future world currency. They proposed that a central bank be put in charge to issue the new currency and regulate currency trading between countries.
#10: The rest of the world hates America
The dramatic change in global sentiment [against] America cannot be underestimated. America was the most loved nation decades ago, but today we are the most hated. If you find it hard to believe, just take a trip abroad. In Europe (where our friends are supposed to be), Americans are treated poorly. Most American travelers wear a Canadian pin on their shirt to pretend they are Canadian so they won’t be treated badly while traveling in Europe.
The United States is so unpopular now that it provides other nations with a stronger incentive to abandon the dollar for international trade agreements.
What will happen to the US dollar when the world’s reserve currency comes to an end?
Very radical changes are coming in the lifestyle of the United States after the disappearance of the dollar. “When this economic tsunami hits the United States, it will make the 2008 recession and its aftermath seem like a slight bump in the road.”
Very undesirable lifestyle changes will be forced on the US through the following:
1. high interest rates on cars and mortgages,
2. massive inflation,
3. Increasing increases in the cost of gasoline, clothing and food,
4. Financing your debt will be much more difficult and will cost much more.
conclusion
Fortunately, these important developments will not happen overnight, but it is important to recognize that they are accelerating. Under the looming economic conditions, a major global shift away from the US dollar could turn into an overnight landslide and trap millions of American families with a bag full of nearly worthless US dollars, not to be one of them. Economists predict that it will accelerate in the coming years, so be careful and be prepared! Investors can make money trading forex if they study the pros and cons beforehand.
