If the mighty US empire falls, how fast will it be replaced?
Many people believe any transition could take decades, BUT history tells us the Chinese Yuan could grow from 1% global treasury reserves to over 60% by 2030….
Well, that’s exactly what happened when the US Empire
overtook the British Empire 100 years ago…..
The consensus opinions believe this change is going to lead to the downfall of the US empire, and the US being dethroned by China.
Is this true?
Is China really well equipped to survive in the deglobalized world that we’re moving into?
How does the digital age affect this geopolitical transition?
Let’s explore these questions, and separate the signal from the noise.
Chapters:
Introduction
The Changing World Order
The Death Of The Great Petrodollar Experiment?
The Dangers Of The Double Ds
Digital Age Conclusions
Introduction:
2022 was a year of two tales.
The first half of the year was dominated by proclamations and predictions of doom for the US Dollar. After Russia invaded Ukraine, and their USD treasury reserves were frozen by the West, the world began to rethink why they hold USD in their reserves.
However, the second half of 2022 was a reality check for the world, as the US Dollar wrecking ball wreaked havoc upon the entire world, during the fastest interest rate hiking schedule in history.
Then early 2023 rolled around, and those calling for the collapse of the dollar rejoiced once again, as the BRICS countries waged economic war on the US!
Our financial system has officially changed forever, following the announcement of the ‘’BRICS’’ nations, declaring they have begun creating a new global reserve currency.
As the petrodollar system continues to crumble, I believe that most macroeconomic analysts are viewing the recent escalation in the breakdown of globalization through the wrong lens.
Many assume the US and the West are going to be drastically affected by this breakdown of globalization.
Many assume that the United States is even going to lose its grip on the world reserve currency, as the 250-year American experiment fails.
I’m not so sure…..
Let’s investigate whether the mighty United States empire is about to fall, and if so, which country is going to take its place.
The Changing World Order
What is an empire cycle anyway?
The reason that everyone is talking about the collapse of the US empire, and the imminent rise of the Chinese, is because of a popular thesis being spread by the billionaire, Ray Dalio.
In his recent masterclass of a book, titled ’’The Changing World Order,’’ Ray projects the coming decline of the US empire and the rise of a Chinese superpower.
He studied the rise and decline of 10 great empires over the past 500 years and noticed MANY similarities amongst all of these great empires.
The 10 greatest empires since 1500 have generally gone through a cycle of rise and decline, over a 250-year timeframe. Dalio interestingly observed how the dominant empire would begin declining as it reached the end of an 80-year long-term debt cycle. Sound familiar to today?
When one empire is in a decline, a smaller and rising potential empire notices this decline and challenges the power of the reigning global hegemon. Dalio believes we’re watching one of these transitions as we speak, and frames the US as the declining empire, about to be overthrown by the rising Chinese empire.
Throughout history, these transitionary periods are generally punctuated with wars, and drastic changes in the global monetary order, which typically result in reserve currency changes.
There’s lots of conjecture surrounding whether the US will lose their reserve currency status or not. There’s even more conjecture surrounding the timeline associated with any transition.
If we just for a second, assume a reserve currency shift is coming, what could it look like?
This short video, brilliantly highlights what occurred in the 20th century, as the US Dollar slowly overtook the British Pound as the global reserve currency.
In 1917 there was less than 1% of US Dollars in the reserves of central banks around the world.
The Great British Pound made up over 60% of reserves at the same time.
However, by 1926, the British Pound had fallen from 66% to only 32%, meanwhile, the US Dollar had grown to make up over 66% of the reserves held in treasuries around the world.
In only 9 years we saw a COMPLETE flip!
If the US empire is going to collapse, and they’re going to lose their reserve currency, will something similar happen?
How does the digital age change this?
How does Bitcoin affect this transition?
If you made it this far, you’ll love the video I published on this topic today, exploring this topic in more detail.
Lets get into our conclusions for this piece, exploring each of the following & more:
🔥China alone is weak
🔥Currency transitions revert back to hard money
🔥This is the first transition with #Bitcoin
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