The US dollar’s reign as the world’s reserve currency is under threat, with global powers like Russia, China, and the BRICS alliance challenging its dominance. If the dollar falls, the consequences could be catastrophic: hyperinflation, soaring interest rates, and a collapse in economic stability. This video explores what losing reserve currency status could mean for your wealth and how to safeguard your financial future in these uncertain times.

TRANSCRIPT:

You know what a dollar is. It’s the cash in your wallet that you use to buy things with. But a dollar is much more than just a currency. In fact, it’s the world’s reserve currency, and by extension, the foundation for much of the United States’ power and privilege.

It’s the reason why the United States can run up a massive national debt with minimal cost and enact sanctions on rival economies with no immediate repercussions. But what would happen if that power were taken away? While some would rather assume that the dollar will always be king, others who are looking at the big picture are not so convinced.

With Russia, China, and the BRICS block alliance laser-focused on dethroning the dollar, and Saudi Arabia and Iran entertaining pricing oil in alternative currencies, it seems to many that the international threats to the dollar’s position of power have never been greater. Especially when these external threats don’t even take into consideration the United States’ very own insistence on running the dollar printing press 24/7 and weaponizing the dollar every chance they get.

But what would actually happen if the U.S. dollar were no longer the global reserve currency? Well, we can assume that interest rates would be sky-high. Import prices would also rise, meaning that the cost of everything would rise, turning inflation into hyperinflation, eroding our savings and our purchasing power. Economic growth would all but stall, and the United States would become another empire fallen.

So just how real is this threat? Well, in order to understand how serious this is, let’s start with what this position actually means. A global reserve currency is a currency held in large quantities by central banks and financial institutions across the world to be used in international investments, transactions, and debt obligations.

And while there have been a handful of reserve currencies used throughout history, the dollar has been the cornerstone of the international financial system for the last 80 years, following the Bretton Woods Agreement of 1944. This agreement cemented the dollar, originally pegged to the value of gold, as the world’s most important means of exchange.

And although the dollar was officially de-linked from gold in the 1970s, the world continued to use dollars thanks to the petrodollar agreement, which essentially ensured that all oil was priced in and traded in U.S. dollars, ensuring that there would always be a global demand for dollars. Dubbed the “exorbitant privilege” of the United States, this position has created immense benefit for the U.S., often at the expense of other countries.

Any country with a central bank can create more currency, but having the world’s reserve currency allows the United States to print more than any other country, creating mountains of debt without having to worry too much about going into hyperinflation. Another benefit to the dollar’s position of power is the political leverage that it creates. No other country can impose sanctions with as much impact as the U.S.

And while all this dollar dominance has bolstered the United States’ position on the world stage, it has also intensified calls for an alternative, especially in recent years. Today, the U.S. dollar is not only the most held reserve currency but also the most used, accounting for almost 90% of all international trade.

Those who claim that de-dollarization will never happen in their lifetime like to point not only to its utilization but also to the fact that there isn’t currently an alternative currency that could handle the sheer volume of trade done in dollars. But we’re seeing technological advances happening at a rapid rate, including the creation of central bank digital currencies, or CBDCs, which are facilitating local cross-border trade, reducing reliance on the dollar, especially in countries that oppose the dollar, such as Russia.

In response to the war in Ukraine, the United States issued hundreds of sanctions on Russia, including cutting off Russian banks and businesses from the rest of the world and, most notably, freezing hundreds of billions of dollars in Russian assets. These assets are primarily U.S. dollars in U.S. Treasury bonds, aka U.S. debt.

But the United States didn’t just stop at freezing these assets. They, along with the G7—an alliance of countries including the U.S., Canada, France, and the UK—agreed that they would seize any interest on these frozen assets and use it as a loan for Ukraine.

This has been a wakeup call for countries storing their wealth in U.S. treasuries and dollars, realizing that at a moment’s notice, if they were to disagree with U.S. policy, their reserves could be in jeopardy.

Prompting many of these countries and their central banks to move away from the U.S. dollar and towards safer alternatives such as gold, which I’ll talk more about in a second.

And while these sanctions have hurt Russia’s economy, they have also shown that there are alternatives available and that these sanctions might not be as devastating as they once were. It’s almost like overprescribing an antibiotic.

While it’s effective at first, over time it encourages the development of new bacteria that’s resistant to the antibiotic, especially when there are many countries who feel as though the United States has been a bully on the world stage, financially benefiting at their expense.

These countries have now banded together and are laser-focused on de-dollarization, specifically the BRICS block, which includes China, Russia, and countless others.

In fact, in the last two years, the BRICS block has had dozens of applicants for new membership. During this time frame, they have created new local trade agreements, created CBDCs to facilitate these agreements, and even have new member countries such as Saudi Arabia considering pricing oil in alternative currencies.

In addition, it’s finally becoming clear that as much as these countries rely on the dollar, the United States relies on these countries. Decades of outsourcing cheap labor overseas and relying on cheap materials is finally catching up to the U.S.

In fact, if you look at the United States and its allied countries, the G7, it is true that they represent about 43% of the world’s GDP, whereas the BRICS block represents only about 30%. But the BRICS block has almost doubled the landmass and quadrupled the population size.

They have the labor, they have the raw materials, including oil production, which again has been the protector of the U.S. dollar’s position of power. It’s becoming more and more clear that while the United States is in charge of the present, they are not going to be in charge of the future.

In fact, in the last 20 years, the amount of U.S. dollar reserves has dropped from 72% to almost 58%, with no signs of slowing. These central banks aren’t moving towards other currencies such as the yen or the euro.

In fact, they are moving towards alternative assets such as gold. When surveyed earlier this year, central banks actually doubled down on this trend, saying that in the next five years, their U.S. dollar reserve holdings will shrink, whereas their gold holdings will increase.

When asked about the reasons for this shift, the top responses were a store of value, concerns about performance during times of crisis, diversification, and no default risk. These concerns speak to much of the United States’ own doings when it comes to the perception of the U.S.’s economic strength.

$35 trillion and counting in government debt has created rapid inflation, inflation that we all have felt the pain of, but in reality could have been much worse if the United States did not have the dollar as the global reserve currency.

Because as the demand for dollars continues, much of the inflation is actually exported to the rest of the world. However, there is a limit to how much other countries will accept. Between bank failures, credit rating downgrades, and geopolitical unrest, there are growing concerns around the stability of the U.S. economy.

This is reflected in the central banks’ move away from the U.S. dollar and toward something like gold, which is a safe haven asset, meaning an asset that is not only a true store of value, but one that historically has always done well during times of crisis.

Because unlike a fiat currency, it doesn’t carry any counterparty risk with its government. These are the same reasons that many of the smartest and wealthiest individuals choose to also protect themselves with gold versus U.S. dollars.

All of this to say, I don’t believe that tomorrow or a week from now or a month from now, the dollar is suddenly going to be poof, overthrown. But what we do know for a fact is that this is a process.

A process that has already begun that is only picking up momentum. Because unless the United States suddenly stops creating more debt, the BRICS block countries are perfectly content to play second fiddle on the economic stage.

No one is upset about sanctions against them, and technology just stops advancing altogether. Well, then I think we can say with confidence that the move away from the dollar is only going to continue to pick up steam.

Meaning that our savings, our wealth, and our future are being chipped away at each and every day. And while unfortunately there’s not much we can do on a global stage, we do have the power to protect ourselves, to take control over our own wealth and make sure that we are setting ourselves up for whatever is coming next.

Because we know there’s a lot happening right now. Whether you already have a plan in place and you want a second opinion, or whether you’re just getting started, if any of this concerns you, talk to one of our expert analysts.

Make sure that you’re protected, that you have a strategy in place. That’s what we’re here for. We want to help. And if any of this video has been helpful for you, or you think there’s someone else who would find it helpful, please be sure to like, subscribe, and share it with them.

Help get the word out. Education is key. As always, I thank you so much for being here. I’m Taylor Kenney with ITM Trading, your trusted source for all things gold, silver, and lifelong wealth protection.