New York, NY, August 5, 2016 – Profit Confidential (www.ProfitConfidential.com) an e-letter of Lombardi Publishing Corporation, a 30-year-old consumer publisher that has served over one million customers in 141 countries, says three key indicators point to a collapse of the U.S. dollar.
“The U.S. may be the world’s largest economy, and the U.S. dollar may be the world’s reserve currency, but three key indicators suggest the long-term downturn in the U.S. dollar points to a collapse of the greenback,” says economist and lead contributor Michael Lombardi.
Lombardi explains that the value of the U.S. dollar has been in a downtrend for the last 31 years. The U.S. dollar index, which compares the greenback to the euro, yen, pound sterling, krona, franc, and Canadian dollar, has been trending lower since 1985. Only over the past two years has the U.S. dollar increased in value relative to other major currencies. That’s not because the U.S. economy is doing so well; it’s that the other economies are doing worse. In technical analysis, this is considered a dead-cat bounce.
Another problem facing the U.S. dollar is that there is too much of it in circulation. The money supply started to increase in 1984; at the same time the value of the U.S. dollar started to decline against other world currencies. To stimulate the economy following the Credit Crisis of 2008, the Federal Reserve announced three rounds of Quantitative Easing, an easy monetary policy that created trillions of dollars in new paper money. Throughout history, countries that have continued printing more of their money eventually saw the value of that money collapse.
“The U.S. dollar is being backed by too much debt, as well. The U.S. national debt continues to rise and currently stands at $19.0 trillion. Unfortunately, a budget surplus is not expected in the U.S. for many, many years,” Lombardi adds. “At the current pace, it’s quite possible that the U.S. national debt will hit $32.0 billion to $34.0 billion within the next 15 years. Regardless of whether Trump or Clinton wins the next election, the debt will only continue to grow.”
“And it doesn’t help the U.S. dollar when the president of the Minneapolis Federal Reserve, Neel Kashkari, says ‘it’s possible’ that the U.S. dollar could lose its status as reserve currency during his lifetime,” Lombardi adds. “The fact of the matter is that the U.S. dollar is more vulnerable now than ever before. The only thing I see that could help in the case of a U.S. dollar collapse is gold. The precious metal has acted as a hedge against currency collapses for a very long time. Count on it to do the same when the U.S. dollar loses its ‘world’s currency’ status.” (Source: Saphir, A., “Fed’s Kashkari says dollar could lose reserve currency status,” Reuters, July 15, 2016; http://www.reuters.com/article/us-usa-fed-kashkari-idUSKCN0ZV2EG.)
Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. More information on Lombardi Publishing Corporation can be found at www.LombardiPublishing.com.