Is the USD becoming Toilet Paper?
Special Report by ML
Can the USD become worthless aka Toilet paper? My answer is yes… and very few are considering this possibility
While we read of the news that the Feds could raise rates by 50 basis points in the coming meeting… the market has already priced in higher rates.. the 10 year has sky rocketed towards 3% levels!
On the flip side the China 10 year bond remains stable and for the first time in my investing career I see the US 10 year paying a higher interest rate then the China 10 year! In the past the US bond was always the lowest rate because it was the safest asset aka the risk free AAA asset! so does this means that funds will flow out of China to head towards the USD as it now pays a higher rate and is more attractive?
My answer is nope… because the market is slowly waking up to the idea that USD is no longer AAA and there is increasingly a chance of the USD becoming Toilet paper!
Inflation is already out of control in the US.. in my investing career I have never seen US inflation this high before.. and from my readings the last time it was this high was in 1970. during. the great stagflation! Do note that 8.5% is actually already a toned down and rigged number.. the real inflation for housing/food/energy on the ground that the common folks in American are feeling are probably like 15% to 20% range…
If we look at forex the USD is actually strengthening in the short term! and you might go wtf? shouldn’t it be worth less due to all these excess printing… well the answer is due to the War in Russia/Ukraine! That’s why Biden didn’t give in to Putin’s demand… US is happy for this war so that investors will seek safety into the USD… countries will buy more weapons from the great America!
But on the flip side.. due to the all harsh sanctions thrown on Russia by the US…
The Middle East, Latin America and Asia countries.. all their central banks have started diversifying into the Chinese Yuan, Euro Dollar and Japanese Yen… now they are waking up to the idea that while USD may still be so called the “safest currency” its foolish to hold your entire reserve in USD and then get punished by future US sanctions… no ones to be at the mercy of the US… so spreading their currency eggs into different basket is more the logical move…
A century ago it was the England Pound that held the name as the world’s reserve currency, but after the world war.. England got saddled with too much debt… while the US economy was booming and it became the richest country holding the most gold reserve in the world… the USD became the reserve currency replacing the British Pound!
We then moved into the industrial age and all the middle eastern countries that provided Oil exports had to trade it in USD using the Swift System.. everyone was happy to settle in USD.. most goods and commodities that move around the world were settled in USD as it was cheap, stable and convenient… but then the 2008 Global Financial Crisis came!!!!
In order to fight the recession, bailout their too big to fail banks and save their precious property market.. US did unlimited QE quantitative easing… printing trillions recklessly… however this did not result into inflation… the hot money actually flowed into the US stock market as I saw the US going into a mad decade of bull run!
from 2009 to 2015… 6 years of bull run.. I tot I was smart selling off my AAPL BRKB and BAC as it was an obvious bubble and a crash could come.. I was so wrong and the bubble grew even bigger and bigger!!!! The US stock market I think when up 4x from 2008 to 2020… it was such an insane bull run due to all the hot money… then we had the Covid recession.. and the solution to the recent crash was the same money printing all over again!!!
This time round… inflation finally came and we are now feeling the higher prices… the world is waking up that we are the ones paying the price for US’s reckless printing… even in my little island of Singapore.. my Teh O Peng (Ice Tea) has gone up from $1.10 to $1.50!!!! The world is now footing the bill for the big fat American’s lavish lifestyle!!! The US has trillions and trillions of debt that they can never repay! They cannot afford to go into default so they can only inflate their way out of this mess…
China has been the biggest exporter to the US… from dirt cheap cotton clothes all the way to higher end stuff like the iPhone is all made in China… the Fat American consumers has always been their number 1 customer… but with all the USD profits made… China has in the past just simply re-invested it into long term USD bonds.. this moves helps to keep their CNY cheap and makes their exports more competitive (which Trumps claims China to be rigging their currency)
However over the past few years China too is waking up that the USD is getting less and less valuable… thus their Grand Strategy of the One Belt and One Road.. instead they the billions of USD to invest in tons of infrastructure projects across Asia and Africa! US now sees China as a Fierce Rival because they know their USD is dying and the CNY will eventually become the future currency… they want to delay or crush China before they can overtake the great America! hahaha
China is not dumb and will not be bullied by the US.. in fact China has started to slowly sell off their portfolio of USD bonds…China holds about 1 trillion of USD debt and 500 bil of Euro debt… while dumb fucks keep telling you that China is going bankrupt and is a fraud… those dumb fucks forget to use their backside to think… if US and Europe is in so much debt… who is on the other side of the bet???
The answer is China! China is the biggest creditor in the world!!!! and now these Westerners want to cheat the game by inflating away their debt owed to the Chinese!!! The West is the actually the Scum Bag that owes money yet doesn’t want to work hard to slowly pay it off… yet they are also the ones calling China the bad guys… well…. that’s how the world really works I guess… in the western media this is it…
The top Exporters of Oil is the Middle East like Saudi Arabia…number two is mother Russia.. in the past they had always sold their commodities in exchange for USD…
The top Importer of Oil is obviously China and India as they are the biggest manufacturing hub in the world aka cheap labor… they work hard to produce all the cheap stuff for us to enjoy…
Today China and India are buying Oil from Middle East and Russia using their own currency or trading commodities for commodities… old age barter style… Russia is no longer using USD due to the sanctions and the Middle East has angered Biden by accepting CNY…
Oil is the biggest traded item in the world…and USD is no longer needed to trade it… the trend going forward is clear… other items will eventually stop trading in the USD and will be settled in other methods of currency… like what you read/watch from Ray Dalio’s changing world order… the change has already begun!
Since China is selling USD bonds… where does China diversify the money into? The answer is obvious… Commodities! Commodities! Commodities! He who holds the most Oil, Gold, Silver, Grain etc… controls the world and controls the blood of the global currency! Thus we have seen the rally in Oil and Gold as well as other common commodities, in fact China has ordered their SOE State Own Enterprises to stock up at any cost!
At the end of the day most people may read my articles and think that I am a crazy guy nearing my 40 that is unemployed and have lost touch with the real world.. aka eat full nothing to do…. some even say that I am a fool that is spreading fear without using my common sense… on the flip side I sometimes get some compliments that I am truly a genius that is able to explain complex financial/economies ideas that is so simple that even a housewife can understand
Devil or Angel…I don’t know and I don’t care…..don’t give a fuck really… this is my SubStack so I can write anything I want and no one can ban my free speech haha, what you reading there is pure, raw and unedited…
I only know that I am a contrarian and I think differently from the herd… I do not follow the herd and I have my own independent thinking, if u want to read something different from the majority then you are most welcomed here, thank you all for your continuous support ^^
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