3 Compelling Reasons Why The U.S. Dollar Will NOT Collapse.
Okay, we realize that this will go against the gain of a lot of you. However with so much negative stuff in the news we thought it was time to present another side of the story.
You can find many news stories of people predicting the collapse of the U.S. Dollar, and the fall of America at any minute. Were not saying everything is coming up roses either, as the truth usually rests somewhere in between.
We do think America is still the greatest country on the planet, and that there are many more good people than bad people in this country.
With that said we found 6 great reasons why the U.S. Dollar will continue to survive.
Many people believe that the U.S. is run by the big corporations. That they are the ones pulling all the strings, and are responsible for all the wars, etc. Now if this is true do you really think they want, or would let the U.S. dollar, and country collapse?
If things were truly to go to hell in a hand basket who would be left to buy their stuff? We think the corporate fat cats understand collapse equals no money for them, and will do everything to prevent a total collapse. The stock market runs in cycles, up, down, sideways.
About every 7-8 years there is a major down turn. Which by the way we are due for one in 2015. The stock market and the dollar have always bounced back.
People since the beginning of time have predicted the end of days. Sure at some point it’s going to happen, but it more than likely be a natural global event. We think there are preppers, and survivalists who hope for a collapse. We don’t, we say be prepared, and enjoy your life. Just our opinion.
6 Compelling Reasons Why The U.S. Dollar Will NOT Collapse.
1. Economic Productivity
Among developed nations the U.S. has had the strongest productivity over the last decade. For example, the U.S. averaged 2.2%, Japan 1.6%, U.K. 1.2%, Germany 0.9%, Canada 0.9%, France 0.8%, and Italy flat. When you consider the deflationary trends now at work in emerging markets and other developed nations, Gary believes that U.S. productivity will continue to outperform and help keep the dollar strong.
2. The World’s Largest Economy
The dominant currency is typically found in the world’s largest economy and the U.S. is head-and-shoulders above the rest. As Gary points out, in 2012 U.S. GDP was $15.7 trillion.
The second closest, China, was nearly half the size at $8.2 trillion. If you think China is about to overtake the U.S. in terms of size, Gary says “China would have to grow 12% a year for 20 years to catch up…it’s now down at about 7.5% growth and as the Chinese economy shifts away from being driven by exports…away from infrastructure, away from heavy borrowing, and so on, their growth is going to grow even more slowly.”
3. Deep and Broad Financial Markets
Here, Gary writes, “Internationally, money—especially today when it can be transferred anywhere in a split second—wants to be where the action is.
That requires not only a powerful and large economy but also deep and broad markets in which to invest. Today, the U.S. Treasury market trumps all others in size and, in the eyes of investors…, in safety as witnessed by the mad rush into Treasury bonds in times of recent global trouble.”
Similarly, he states, “American stock market capitalization is four times that of China, Japan or the U.K. and is over three times the Eurozone’s…Almost 50% of Treasuries are held by foreigners but only 9.1% of Japan’s government net debt is owned by non-Japanese. According to the IMF, 62% of the world’s currency reserves are in dollars.
The 24% in euros is down from 29% four years ago. Foreigners so love investing in the U.S. that at the end of 2012, it exceeded U.S. investment abroad by $4.4 trillion, up from $4 trillion a year earlier.”
To see the next 3 reasons why the U.S. Dollar will not collapse go to the full article here: FinancialSense.com