Valuetainment - May 12, 2023


Will The U.S. Dollar Collapse As a Reserve Currency？ - History of World Currency Explained


Episode Stats

Length

12 minutes

Words per Minute

205.25572

Word Count

2,614

Sentence Count

210

Misogynist Sentences

1

Hate Speech Sentences

8


Summary


Transcript

00:00:00.120 Will the U.S. dollar collapse?
00:00:01.920 It's a question a lot of people are asking.
00:00:03.540 A lot of videos are going viral on Instagram, TikTok.
00:00:05.940 Oh my God, what would happen if the U.S. dollar
00:00:08.480 as a currency, world currency,
00:00:10.300 is replaced with somebody else?
00:00:11.580 Because what's going on with BRICS?
00:00:12.900 You're seeing China and Russia become best friends.
00:00:14.640 You're seeing a potential peace deal,
00:00:16.100 Iran and Saudi Arabia.
00:00:17.380 Brazil is there with Lula, with these guys.
00:00:19.220 What would happen if they start buying oil through one
00:00:22.220 and this is gonna be bad for America?
00:00:24.100 I'm telling you, this is what we have to worry about.
00:00:25.800 Well, who's right, who's wrong?
00:00:27.140 We don't know.
00:00:28.120 Here's what we do know.
00:00:28.860 Since 1450, there's only been six different world currencies.
00:00:33.380 And when you find the data,
00:00:34.780 you can easily make the argument
00:00:36.220 why the U.S. dollar will be replaced
00:00:37.860 or you can also make the argument to say,
00:00:40.080 not anytime soon.
00:00:40.980 Let's get right into it.
00:00:50.840 Okay, so if you get value from this video,
00:00:52.500 give it a thumbs up and subscribe to the channel.
00:00:54.300 Let's get right into it.
00:00:55.100 A couple of different things.
00:00:55.960 What is a world reserve currency?
00:00:58.140 When you hear about this, what does this really mean?
00:01:00.460 What that is, is it's the currency
00:01:02.520 that is held in significant quantities
00:01:04.640 by governments, institutions,
00:01:05.820 as a means of international payments,
00:01:08.200 foreign exchange reserves, and investments.
00:01:10.160 So in other words, it's the most liquid capital
00:01:12.700 that's available in the international market
00:01:15.120 for people to use in exchange for whatever it may be.
00:01:18.180 And that happens to be today, the U.S. dollar.
00:01:20.180 So you know this whole thing about currency,
00:01:21.420 like what happens if the U.S. dollar collapses
00:01:23.200 and we're using a different currency,
00:01:24.780 what's going to maintain their value?
00:01:26.860 Anything that's a non-duplicatable asset,
00:01:29.140 such as what?
00:01:30.260 Alternative investments, right?
00:01:31.640 Such as art.
00:01:32.580 Because when you look at art last year,
00:01:34.880 did you know last year,
00:01:35.740 the three auction houses had a record-breaking year
00:01:38.120 of $18 billion of art sold last year.
00:01:42.380 And so many companies like Goldman, Morgan,
00:01:45.380 all these other companies are sitting there
00:01:47.220 recommending their clients
00:01:48.860 to look at alternative investments,
00:01:50.760 specifically within the art space.
00:01:52.360 And the one company that's disrupting this industry
00:01:54.480 right now is Masterworks.
00:01:55.700 And here's how they're doing it.
00:01:56.800 The average person cannot go buy a Picasso,
00:01:58.940 cannot go buy a Banksy or a Warhol
00:02:00.760 and say, oh my God, I can't buy something like that.
00:02:02.640 That's $3 million.
00:02:03.460 I can't buy something like that.
00:02:04.600 It's $2.8 million.
00:02:06.400 But anybody can go buy a share of it.
00:02:08.440 And that's what happens with Masterworks.
00:02:09.820 They now have over 700,000 users
00:02:12.400 that are part of Masterworks
00:02:14.700 and anybody can go buy a share.
00:02:16.620 And it's just like stock you're buying within a company.
00:02:19.320 It's all regulated.
00:02:20.500 It's all through SEC.
00:02:21.960 And by the way, two things you need to talk about Masterworks.
00:02:23.580 Every single piece of art that they sold,
00:02:25.300 they provided net profits to investors.
00:02:27.560 And last year, in 2022,
00:02:28.860 they paid $25 million to their investors.
00:02:30.700 So if you want to participate
00:02:31.640 with what Masterworks has gone on,
00:02:33.900 click on a link below,
00:02:35.260 go get registered, learn for yourself.
00:02:37.740 And if you're comfortable,
00:02:39.220 start diversifying by investing
00:02:41.120 in alternative assets with Masterworks.
00:02:43.840 Okay, so let's take a look
00:02:44.920 at the six major world currencies
00:02:46.640 we've had since 1850.
00:02:48.360 Believe it or not,
00:02:49.020 the first one was Portugal.
00:02:50.460 From 1450 to 5030,
00:02:52.340 lasted 80 years.
00:02:53.160 This is during the age of exploration.
00:02:54.840 Portugal created a dominant global empire.
00:02:57.460 Ottoman Empire closed off
00:02:58.840 the traditional trade route to Asia,
00:03:00.580 forced innovation through advanced
00:03:02.260 and navigational technology.
00:03:04.060 The Portuguese were able to reach Africa,
00:03:06.680 Asia, and the New World.
00:03:08.240 Portuguese currency became the primary currency
00:03:10.020 used in global trade,
00:03:11.000 and it established military outposts
00:03:12.940 along the coasts of Africa, India,
00:03:14.960 Malaysia, Japan, and China.
00:03:16.380 They became overextended.
00:03:17.720 The empire eventually declined
00:03:19.060 due to attacks and competition
00:03:20.680 from other countries,
00:03:21.800 mainly the Dutch, British, and the French.
00:03:23.700 You would have never guessed Portugal,
00:03:24.860 would you have?
00:03:25.500 But they were the first.
00:03:26.140 Second is Spain,
00:03:26.920 which by the way,
00:03:27.440 lasted the longest, 110 years.
00:03:29.140 From 1530 to 1640,
00:03:31.140 combined forces with Portugal
00:03:32.900 to form the Iberian Union.
00:03:34.740 Spanish silver coins
00:03:35.840 were the first global reserve currency
00:03:37.700 recognized in Europe, Asia, and Americas.
00:03:40.280 And this happened due to abundant silver supplies
00:03:42.800 from Spanish South America.
00:03:44.500 Eventually, they collapsed through wars
00:03:46.120 and revolutions by the mid-1600s.
00:03:48.520 Next one is Netherlands,
00:03:49.540 which lasts 80 years.
00:03:50.600 From 1640 to 720,
00:03:52.500 they had their rise to global power
00:03:53.880 resulted from creation
00:03:54.960 of the Dutch East India Company,
00:03:57.060 first publicly traded
00:03:57.980 multi-international corporation in the world,
00:04:00.560 founded to protect that state spice trade
00:04:03.180 in the Indian Ocean
00:04:04.400 and to assist in the Dutch War of Independence
00:04:06.620 from Spain.
00:04:07.220 The Dutch defeated Portugal and Spain economically
00:04:09.940 by positioning themselves
00:04:11.500 to profit from European demands for spices.
00:04:14.120 France and England started
00:04:15.140 their own spice trading companies
00:04:16.620 and went to war with the Dutch.
00:04:18.180 Saturated spice market
00:04:19.580 and the costly wars destroyed the Dutch
00:04:21.960 as a global currency.
00:04:23.500 Next is France,
00:04:24.380 which lasted 95 years.
00:04:25.780 From 1720 to 1815,
00:04:27.560 France was best positioned
00:04:28.660 to be the next reserve currency,
00:04:30.540 achieve European dominance
00:04:31.780 under Louis XIV,
00:04:33.140 but he put France in massive debt
00:04:35.500 caused by war
00:04:36.860 and extravagant parties
00:04:39.040 implemented heavy taxes,
00:04:40.880 something we're similar
00:04:41.560 with here in the States.
00:04:42.720 The 1789 French Revolution
00:04:44.340 was caused by an economic turmoil
00:04:45.920 and public outrage.
00:04:47.000 After a decade of civil war,
00:04:48.960 Napoleon takes over.
00:04:50.280 So this guy Napoleon liked a lot of wars.
00:04:52.000 Obviously we know about that,
00:04:52.920 but it lasted from 1803 to 1815,
00:04:55.280 conquered a lot of territory,
00:04:56.820 eventually overextended himself
00:04:58.560 and now comes a new currency.
00:05:00.340 Great Britain.
00:05:01.180 Next one,
00:05:01.920 the financial capital of the world,
00:05:03.340 London,
00:05:03.900 105 years from 1815 to 1920,
00:05:06.640 after Napoleon's defeat
00:05:08.080 at the Battle of Waterloo in 1815,
00:05:10.120 England dominates global trade.
00:05:11.980 For 105 years,
00:05:12.880 Industrial Revolution
00:05:13.760 combined with advanced
00:05:14.820 shipbuilding capabilities
00:05:16.400 to being an island nation
00:05:18.540 made them the most dominant navy
00:05:20.380 in the world.
00:05:21.000 Dominant navy equals
00:05:22.340 dominant global trade.
00:05:24.160 The sun never set on Great Britain
00:05:25.960 was a saying they said
00:05:27.060 for decades during that time.
00:05:28.780 And then eventually,
00:05:29.600 World War I
00:05:30.200 destroyed Great Britain's economy
00:05:31.820 and position as a reserve currency
00:05:33.200 took on a massive amount of debt
00:05:34.640 to win the war.
00:05:35.560 The U.S. benefited massively
00:05:36.840 from World War I
00:05:37.740 and every country
00:05:38.960 from both sides
00:05:40.080 of World War I
00:05:41.180 were borrowing money
00:05:42.060 from the U.S.
00:05:42.740 to pay the U.S.
00:05:43.660 to build things for them.
00:05:45.420 And during World War I,
00:05:46.420 the U.S. started transitioning
00:05:47.960 from a under-industrialized
00:05:50.040 agricultural economy
00:05:51.640 to the industrial manufacturing powerhouse
00:05:54.580 it eventually became.
00:05:55.600 So then comes the United States,
00:05:57.600 which is kind of tricky
00:05:58.520 because some say
00:05:59.300 it started in 19...
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00:06:22.900 1920, which means
00:06:25.400 the U.S. currency
00:06:26.300 has been the world currency
00:06:27.420 for 103 years.
00:06:28.680 But some say it happened in 45,
00:06:30.740 which is only 78 years.
00:06:31.960 Let me tell you why.
00:06:32.700 You know, those that say
00:06:33.600 it became the world currency
00:06:34.600 in 1920,
00:06:35.360 well, it was because
00:06:35.860 we had the healthiest economy
00:06:37.420 in the world
00:06:38.040 during the World War I
00:06:39.180 that was taking place.
00:06:40.120 So automatically it's like,
00:06:41.180 well, we think the U.S. dollar
00:06:42.220 is going to be the currency.
00:06:43.480 However, technically,
00:06:44.640 the dollar did not become
00:06:45.780 the official reserve currency
00:06:47.780 until the post-1944
00:06:49.500 Bretton Woods Agreement.
00:06:51.180 And after World War II,
00:06:52.260 the U.S. basically
00:06:53.580 had all the gold
00:06:54.700 in the world.
00:06:55.360 And because of that,
00:06:56.140 countries around the world
00:06:57.020 agreed to treat the U.S. dollar
00:06:58.380 as an equivalent to gold
00:07:00.340 and the dollar
00:07:01.000 was redeemable in gold
00:07:02.620 until 1971,
00:07:04.560 which kind of changed the game.
00:07:05.560 And that's why a lot of people
00:07:06.340 are saying,
00:07:06.760 what is the dollar
00:07:07.380 backed by today?
00:07:08.160 At least in 1970,
00:07:09.260 it was a dollar
00:07:09.820 was backed by gold.
00:07:10.900 But how about today?
00:07:11.760 It's more risky.
00:07:12.680 It's more fragile.
00:07:13.440 It is a very good argument
00:07:14.440 a lot of people make.
00:07:15.260 The dollar has been
00:07:16.160 the reserve currency
00:07:16.860 now for either 102 years
00:07:18.140 or 79 years,
00:07:19.360 depending on how you look
00:07:20.320 at the start date.
00:07:21.060 So for the people that say
00:07:22.340 this will never happen
00:07:22.980 to the dollar,
00:07:23.540 what makes the dollar
00:07:24.180 so much more powerful
00:07:25.240 that it'll never happen to this?
00:07:26.460 They'll say,
00:07:27.060 well, the infrastructure
00:07:27.780 that we've spent decades building
00:07:29.220 or we have the most money circulating
00:07:31.440 or most goods
00:07:33.060 are priced out
00:07:34.040 by the U.S. dollar
00:07:35.120 or the fact that
00:07:35.980 we've had a lot of momentum
00:07:36.780 and all these momentum
00:07:37.840 year after year after year
00:07:38.980 and it's a habitual thing
00:07:39.960 that we've been doing.
00:07:40.640 It's like, listen,
00:07:41.060 I'm just using the U.S. dollar.
00:07:42.480 It's going to be so hard
00:07:43.160 to get away from it.
00:07:44.120 But as we know
00:07:44.980 how innovation works,
00:07:45.900 think about an app
00:07:46.660 used five years ago.
00:07:47.660 You're not even thinking
00:07:48.240 about it today.
00:07:48.860 Groupon, let's just say.
00:07:50.080 You know, everybody was on Snapchat
00:07:51.220 and then everybody was using us.
00:07:53.840 The change is so quick
00:07:55.660 with technology.
00:07:56.480 So what needs to happen
00:07:57.520 for us to move on
00:07:58.700 to a new currency?
00:07:59.940 So you would need
00:08:00.800 a currency capable
00:08:01.960 of handling trillions
00:08:02.800 of dollars of trade
00:08:03.800 per day,
00:08:04.660 several hundred thousand
00:08:05.520 transactions per second,
00:08:07.200 and even bigger than that,
00:08:08.340 a government
00:08:08.940 that others would trust.
00:08:10.680 So if you're,
00:08:11.260 oh, we're going to go to one.
00:08:12.120 Do you trust China?
00:08:12.880 We're going to have
00:08:13.280 a new world currency
00:08:14.640 that everyone's going to be using.
00:08:15.640 Do you trust
00:08:16.420 or all governments
00:08:17.500 coming to get it to use one?
00:08:19.180 Is the trust level high
00:08:20.400 for somebody
00:08:20.880 who want to do that?
00:08:21.640 By the way,
00:08:22.260 one of the things
00:08:23.100 that we did think about
00:08:24.080 for those that say
00:08:25.260 it'll never happen.
00:08:26.220 It's not going to happen
00:08:26.760 during my lifetime.
00:08:27.560 I'm only 28 years old.
00:08:28.760 It'll happen seven years from now,
00:08:30.080 maybe, but not right now.
00:08:31.180 Okay.
00:08:31.580 What did we learn during COVID?
00:08:33.680 We learned how much
00:08:35.100 we relied on Taiwan for chips.
00:08:37.240 We learned how much
00:08:38.680 we relied on China
00:08:39.860 for our pharmaceuticals,
00:08:41.420 manufacturing China.
00:08:42.900 If there was anything
00:08:44.380 that happened during COVID,
00:08:45.860 it was a big commercial
00:08:47.260 to the world to say,
00:08:48.460 you rely on China.
00:08:50.220 Okay.
00:08:50.900 We all felt it.
00:08:51.840 And they stood up tall
00:08:52.740 and said,
00:08:53.120 hey, you need us.
00:08:54.760 You made a mistake years ago
00:08:56.360 doing all this stuff for us
00:08:57.800 and we were winning
00:08:58.480 on the backs of US.
00:09:00.440 But too late now
00:09:01.460 because now you need us.
00:09:02.880 It's like,
00:09:03.360 hey, Apple's moving away
00:09:04.940 from China to go to India.
00:09:06.500 Well, there's some reliability.
00:09:08.820 We're leaning on China
00:09:10.120 for some of this stuff.
00:09:10.840 So again,
00:09:11.220 whether that causes
00:09:12.000 anything or not is irrelevant.
00:09:13.760 But one has to be paranoid
00:09:15.280 to think that there is
00:09:16.620 a possibility
00:09:17.260 because during COVID,
00:09:18.380 we were definitely
00:09:19.000 relying on China a lot.
00:09:20.300 I may have just convinced you
00:09:21.260 to say,
00:09:21.580 well, Pat,
00:09:22.060 if that's the case,
00:09:22.980 we're definitely going
00:09:23.460 to go to one.
00:09:24.080 Well, let's argue myself
00:09:25.660 on what is the global
00:09:26.760 one reserves worldwide
00:09:28.340 comparable to
00:09:29.280 the US dollar reserve worldwide.
00:09:32.560 This is what it's looking like.
00:09:33.800 So if you look at
00:09:34.280 the global reserve currency,
00:09:35.260 you'll see US dollar
00:09:36.060 all the way at the top
00:09:37.160 at around 60%.
00:09:38.140 Then you have the euro,
00:09:39.420 then you got the yen
00:09:40.320 and all the way at the bottom.
00:09:42.000 Do you see what that is?
00:09:42.700 Renminbi, RMB,
00:09:44.120 it's what the yuan is.
00:09:45.280 For China,
00:09:46.140 it's not even close.
00:09:47.240 So for that to happen,
00:09:48.540 a lot would need to change.
00:09:50.520 But some people say,
00:09:51.300 well, Pat,
00:09:51.760 the US dollar share
00:09:52.920 of global central bank reserve
00:09:55.040 is the lowest we've had
00:09:55.920 in 30 years.
00:09:56.560 We can look at that as well.
00:09:57.760 And if you see this chart
00:09:59.000 with a lot of the panic
00:10:00.080 of where we are today,
00:10:01.120 you would see
00:10:02.100 that from 1979 to 1996,
00:10:05.060 it was lower
00:10:06.720 than what it is today.
00:10:08.320 But if we go back
00:10:09.140 and think about
00:10:09.680 when we were the strongest,
00:10:10.660 it's all the way back
00:10:12.080 from 70 to around 78
00:10:14.100 until this president,
00:10:15.440 the guy named Jimmy Carter
00:10:16.360 showed up,
00:10:16.980 which the closest president
00:10:17.800 we've ever had to Jimmy Carter
00:10:18.880 is a guy named Joe Biden.
00:10:20.060 So that's another fear
00:10:20.820 a lot of people are having
00:10:21.520 on what's going to happen
00:10:22.080 to our currency.
00:10:22.900 I want to show you
00:10:23.420 these two charts
00:10:24.060 just for you to look at,
00:10:25.060 see on what the dollar,
00:10:26.060 the power of the dollar
00:10:26.820 is today.
00:10:27.400 If you look at this one here,
00:10:28.440 it shows the share
00:10:29.780 of over-the-counter
00:10:30.520 foreign exchange transactions.
00:10:32.500 You see the blue?
00:10:33.560 That's US.
00:10:34.720 Look what percentage
00:10:35.640 of it is blue,
00:10:36.940 US.
00:10:37.540 Orange is euro.
00:10:38.880 Then you have the pound,
00:10:39.780 which is green.
00:10:40.800 Then the light blue
00:10:41.660 is the yen.
00:10:42.880 The pink is other.
00:10:44.480 You see that small
00:10:45.520 little yellow right there?
00:10:47.100 That's the Chinese one.
00:10:48.520 See how small it is?
00:10:49.320 It ain't that big.
00:10:50.120 Then look at this other chart
00:10:51.300 when it comes down
00:10:52.360 to share of export invoicing.
00:10:54.920 In America,
00:10:56.000 it's pretty much
00:10:56.680 the US dollar.
00:10:57.640 In Asia Pacific,
00:10:58.740 it's again,
00:10:59.540 pretty much the US dollar
00:11:00.520 70 something percent
00:11:01.540 of the time.
00:11:02.200 A small percentage
00:11:02.940 is euro.
00:11:03.640 Pink is other.
00:11:04.540 In Europe,
00:11:05.100 they pretty much
00:11:05.580 use the euro.
00:11:06.380 Orange is euro.
00:11:06.980 But if you look at also
00:11:08.020 the rest of the world,
00:11:08.960 80% of the time
00:11:09.920 is the US dollar.
00:11:10.900 So the US dollar
00:11:11.460 as of today,
00:11:12.420 it's still the main currency
00:11:14.580 that everybody uses.
00:11:15.700 Closing thoughts.
00:11:16.420 Henry Kissinger
00:11:17.200 once said the following,
00:11:18.540 who controls the food supply
00:11:19.960 controls the people.
00:11:21.180 Who controls the energy
00:11:22.260 can control the whole continent.
00:11:23.840 Who controls money
00:11:25.060 can control the whole world.
00:11:27.000 And you know
00:11:27.340 who controls money?
00:11:28.620 US controls money.
00:11:30.540 Now,
00:11:31.180 sometimes
00:11:31.960 when you have a lot of power
00:11:33.260 and it's been around
00:11:33.940 for a while,
00:11:34.640 you become entitled.
00:11:35.400 You become arrogant.
00:11:36.880 You become soft.
00:11:37.980 You create blind spots.
00:11:39.200 You start looking at the outside
00:11:40.520 as the enemies.
00:11:42.060 Vanderbilt's
00:11:42.540 had a lot of money.
00:11:43.760 All their money.
00:11:44.640 You know how long it lasted?
00:11:45.660 Two generations.
00:11:46.520 You know why?
00:11:47.320 Because one of the sons,
00:11:48.660 all he wanted to do
00:11:49.380 was spend the money and party.
00:11:50.720 And US right now
00:11:51.700 is spending money
00:11:52.660 as if we have money forever.
00:11:54.940 And if I,
00:11:56.140 the enemy,
00:11:56.680 is looking at US,
00:11:57.860 if there's ever
00:11:58.840 been an opportunity
00:12:00.540 to go in there
00:12:01.540 in a creative way,
00:12:02.520 whether it's global CBDC,
00:12:03.720 whether it's buying
00:12:04.860 some US politicians
00:12:05.860 and leaders,
00:12:06.580 whether it's dividing
00:12:07.420 America internally,
00:12:08.860 whether it's any of those
00:12:10.080 manipulative ways
00:12:11.020 to hurt America,
00:12:12.260 this is a great season for it.
00:12:13.960 Am I saying it can happen
00:12:14.840 next 12 months,
00:12:15.720 24 months,
00:12:16.360 36 months,
00:12:17.000 5 years,
00:12:17.460 10 years?
00:12:18.160 No.
00:12:18.840 But can it happen
00:12:19.520 next 10,
00:12:20.160 15,
00:12:20.500 20 years?
00:12:21.280 Yes.
00:12:21.980 If the US gets
00:12:23.740 too cocky
00:12:24.680 and comfortable,
00:12:25.680 somebody else can come
00:12:26.900 and take our lunch
00:12:28.680 and then all of a sudden
00:12:29.340 everyone's looking around
00:12:29.980 saying,
00:12:30.200 what happened to the US?
00:12:31.200 It can happen that quickly
00:12:32.100 because technology moves
00:12:33.100 very quickly.
00:12:34.520 Having said that,
00:12:35.500 if you got value
00:12:36.140 from this video,
00:12:36.740 give it a thumbs up
00:12:37.340 and subscribe to the channel.
00:12:38.420 I got another video
00:12:39.060 I want you to watch
00:12:39.740 about CBDC.
00:12:41.080 If you've never seen it,
00:12:42.140 click here to watch it.
00:12:42.860 Take care, everybody.
00:12:43.580 Bye-bye, bye-bye.
00:12:44.040 Bye-bye.