Despite all its troubles, the US financially beats out Europe and China. A lot of dollars now coming into the US from overseas, strengthening the US dollar relative to other currencies.
Europeans and Asians getting negative returns.
The US dollar is not strong, but it’s better to the foreign investors than what they have available internally. US dollar index is 110 today, an unprecedented high.
That depresses the price of gold and silver. Gold and silver effectively on sale in dollar terms. Gold and dollar prices are inversely related.
Credit problems starting to surface. Cheap credit debt starting to default.
FED threatening to unwind its balance sheet. $8.8 trillion is on the US balance sheet, and we owe 6 trillion 100 billion dollars to the FED.
COVID shut down a tremendous amount of US economic growth.
US has a weak economy, high inflation, but continued consumer spending due to government handouts, which markedly increased debt.
FED trying to fight inflation without shooting the economy in the foot, while simultaneously unwinding the balance sheet.
Fred sees a continued increase in interest rates. Junk debt going into default. Will lead to a credit crunch.
Growth in stocks up until 2 years ago came from companies being able to borrow cheap money. Without cheap money, companies need to show that their valuations are justified.
How to get people to come back to work? With higher costs, workers have expectations they need to earn more.
Is it safer to have money in local credit union? People have a feeling they are separated from banking institutions.
Lots of fraud associated with pandemic payouts.
Executive Order 14067, issued 3/9/22, gives 180 days to come up with a plan for digital currency, then 20 days to start implementation.
Fred thinks it will be 5 to 10 years before digital currency is implemented, and it will be an evolving thing.
Digital currency won’t solve any problems. Money will look different, and it will be easy for the govt to transfer funds. And privacy is done.
What if government declares cash is worthless and must be converted to digital by a certain date?
Reasons our founding fathers said only gold and silver were the standard of our monetary system.
Unfortunate consequences to the economy of the US since getting off the gold standard in 1971.
Numismatic coins are far safer than paper dollars. Paper dollars getting devalued very rapidly right now.
How has the dollar survived as the petro dollar? Since Bretton Woods, It’s been only possible to buy oil in US dollars. Forces foreign countries to stockpile US dollars, which otherwise don’t look like a good investment.
Seeing some countries transact for oil in other than US dollars. Fred doesn’t think the US will allow other countries to throw out the US dollar as the petro dollar.
We’ll never have a government that will tell us the truth. All governments lie. Flaw in current process is change in value of paper dollars.
