Rebel Capitalist News The Dollar Is Crashing...Again!! Is This The Beginning Of The End?
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Apr 21, 2025 Recent discussions delve into the alarming decline of the U.S. dollar and its potential impact on the global economy. Experts debate the precarious state of the dollar as the world's reserve currency and explore the relationship between dollar strength and twin deficits. Insights into dollar liquidity reveal how financial systems can be affected during times of stress and the implications of credit market freezes. The podcast also emphasizes the need to reevaluate economic models in light of dollar fluctuations and encourages listeners to stay engaged with these crucial discussions.
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Dollar Crash Narrative Misses Supply
- The dollar's crash narrative focuses mainly on demand, ignoring the supply side driven by global lending dynamics.
- Dollar supply contracts when loans are paid down, often faster than demand drops, supporting dollar strength.
Dollar Creation via Lending
- The global monetary system is a network of commercial bank balance sheets that create dollars through lending.
- When loans are repaid, those dollars disappear, contrasting with printed currencies that remain constant in supply.
Dollar Debt Repayment Shrinks Supply
- Entities with dollar debt must sell other currency assets to buy dollars and repay loans, reducing global dollar supply.
- Shifting debt from dollars to local currencies decreases demand and supply for dollars, paradoxically strengthening the dollar.