Name: It’s Started: The US Dollar is Collapsing and It’s Way Worse Than You Think
Uploaded: 2025-08-09T18:28:44.000Z
Duration: 14 min 25 s
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Sentences with adverbs of degree

The dollar is in danger, and China has the opportunity to hit the dollar so hard that the dollar will stop being the global currency reserve.

This is the first time since 1945 that the dollar is truly in danger.

The imperative

So here in this video, let me give you the facts, let me give you the numbers, and you can judge everything by the end of this video.

Because China is dumping US treasury bills, and China is dumping US dollars, oversupplying the market with so many dollars that the dollar is losing its value significantly.

If you look at the countries that has most of the US dollars, you will quickly see at the top of the list China with around 3.6 trillion dollars of foreign reserve.

The same thing applies to Japan, Switzerland, and the rest of the countries that you see on the list.

And that's because countries since 1945 have been accumulating as many dollars as possible since the more dollars you have, the more you can trade with the rest of the world.

And since the US market is the largest market in the world, countries mostly sold in the United States, and when you are selling in the US, you are actually obtaining dollars.

And that's how the rest of the world ended up with so many dollars.

Now if all of these countries suddenly dump their dollars, that will flood the market with so many dollars, and if there won't be enough buyers on the other side, that could significantly devalue the dollar.

But having so many dollars is just part of the problem.

Because the second part of the problem are the treasury bills.

At the top of the list, we have Japan that has over a trillion dollars of US treasury bills.

That is followed with China with 760 billion dollars of US treasury bills, and then we have other countries.

In grand total, there are around 8.5 trillion dollars worth of treasury bills that are being held by foreign entities, by foreign governments, by foreign corporations.

And a treasury bill is a bill or a debt that the US government has issued and that was purchased by somebody.

And now the US government has to pay the people who actually hold those treasury bills an interest rate for loaning their money to the US government.

The fact that the US dollar has been the global currency reserve was a double edged sword.

On one side, it allowed the United States to trade with the rest of the world and be the leader of the global trade, and it allowed the United States to have the soft power that no one else could actually have that kind of power.

On the other side, over time, those countries weren't simply sitting around, but they have been developing and buying a lot of US treasury bills and a lot of US dollars.

And now they have leverage over the United States.

And if they suddenly start dumping their treasury bills, what's going to happen to the demand of the treasury bills?

Their demand is going to go down over time.

Now another thing to consider is that United States have been a safe haven for investments.

So if you are making so much money, and you are investing a big amount of money, and you want the super safe investment possible, now historically, that has been gold.

But since 1945, the US treasury bills and the US dollar have been considered as good if not better than gold.

Because gold does not pay you interest, but US treasury bills pay you interest.

And will the US government ever go bankrupt?

And that's why whenever there is turmoil, whenever there is a crisis, whenever there is any kind of uncertainty, everybody suddenly just rushes to the market in order to buy the US treasury bills.

And that's why the yields on the treasury bills suddenly start going down.

And that was probably the bet that Donald Trump and the White House made.

They are like, we are going to cause this massive trade war all across the globe and everybody is going to panic and they will come and buy US treasury bills.

But you know what, the absolute opposite has happened.

There was no rush around the world to buy US government bonds, but people started dumping their treasury bills.

And a lot of people claim that it was China or Japan or some of those countries who are suffering from this trade deal or the trade war and they are dumping their treasury bills which is causing the treasury yields to rise.

Now that has a lot of implication, because if treasury yields suddenly rise in the US, that will force interest rates to rise, that will force the cost of everything to rise in the US.

And that is what is truly posing the real danger to the US dollar at this moment.

If you compare the US dollar against the euro, it has been devaluing.

Just a few months ago, at the beginning of the year, a single dollar was as much as a single euro, but right now, a single dollar is equal to almost 1.3 euros.

And a weak dollar just signals one thing, that people are selling the dollars and they are buying alternative assets.

And this is a very clear signal that maybe the euro can replace the dollar as the global currency reserve.

Again, this kind of massive changes never happen overnight, they take years, but when you have such a crisis of magnitude that we have right now, which is reshaping the global world order, at this moment, people should turn to the US, but they are not turning to the US, they are turning to alternative currencies, especially the euro, because the European Union showed itself that they are very calm, they can actually negotiate with everybody and they are very predictable allies.

In business and investments, you want to be predictable.

I know that in business, sometimes when you are starting your business, you want to be unpredictable so that you can sign a very good deal.

But think about it from capital allocation.

Imagine you are Jamie Dimon, imagine you are sitting at the head of some kind of huge investment bank and you have to make a decision, you are allocating a bunch of money, billions of dollars, trillions of dollars.

The only way you can do that is when you have a predictable outcome, the only way you can do that when you know the rules and you know how things are working because you are allocating so much capital.

And you cannot possibly do that when things are very unclear and you don't know where things are going and that's another reason why the markets are crushing and have been crushing for the past 2 to 3 months.

So what does a weak dollar mean for the economy overall?

First of all, imports are becoming much more expensive.

Because when you are importing anything from any other country, it doesn't matter whether it's China, it's Vietnam, it's the European Union, you have to check your dollars and you have to buy the Mercedes in Germany with Euros, so you have to change the dollars into the Euros to buy the German car, which means that if the dollar is becoming weaker compared to foreign countries or the foreign currencies, suddenly everything that you import from the rest of the world to the United States is going to rise in prices, which means that prices are about to increase, which means that inflation is coming.

And the United States imports trillions of dollars worth of goods.

Just last year, the United States imported around 3 trillion dollars worth of goods.

So if you are buying a car, a furniture, or maybe you are a developer who builds houses, the cost of those materials are going to rise, which means that a weaker dollar is going to cause massive inflation, at least in the short run, maybe in the long run.

So if you want to actually cheaper prices, you want a stronger dollar.

But a stronger dollar is also a double edged sword, on one side, it actually makes the imports much cheaper, but it makes the exports much more expensive.

If you want to boost the United States exports, yes, you want a cheaper dollar, but if you want to make it much cheaper for people to buy things in the United States, then you want a much stronger dollar.

But what really scares me off is that a combination of a weak dollar and a tariff are going to literally spike the prices significantly.

So we already have like a 10% of baseline tariff, and then 10 to 20 or maybe 100% of reciprocal tariffs.

Even if we assume that they will make a deal and there are not going to be any kind of reciprocal tariffs, there are going to be the 10% baseline tariff.

Prices are going to increase by 10% guaranteed.

Secondly, prices will increase because of a weak dollar.

And when prices rise, what do you think the Fed does in those circumstances?

It's to make sure that prices are stable in the United States.

And that means raising the interest rates.

And the latest assumptions compared to the last year were that interest rates are going to go down.

But those assumptions were made on the fact that United States is not going to have the trade wars that it's having right now, and the US dollar will keep strengthening.

But the entire rules are changing right now that the Fed might be forced to raise the interest rates, which means that everything will rise again.

Most people, when they go and buy a new car, do you think they actually have the cash to buy that car?

When people buy houses, your mortgages could possibly rise and etc.

You can apply that to everything that you actually buy right now.

Secondly, the faith in the dollar because of that could actually diminish.

All of those countries that I gave you as an example right now are holding so much US dollars.

And if their dollars are becoming much less valuable, their faith in the dollars will become much less valuable.

Those people or 8.5 trillion dollars of treasury bills that are being held by foreign entities, they will start thinking, well, we actually have so many dollars, but our dollars right now can buy less things.

So does it make sense in an economic sense or investing sense to keep our money in the treasury bills, which means which could actually lead them to start selling their treasury bills and the US dollars, which could lead to a dominant effect where the dollar will start massively losing its value over time.

This is not going to happen like overnight.

There is still a lot of faith in the dollar and especially the investors.

Nobody wants the dollar to actually crash.

Everybody is interested in the prosperity and the growth of the United States.

Even if you don't like the United States, even if you're China, even if you're Japan, who is now faced to make a bad deal with the United States, even the European Union, you have like trillions of dollars of US treasury bills.

You don't want the dollar to actually crash.

So everybody around the world is interested in the stability of the dollar.

But on the other side, compare the US dollar to any other investment.

If you see a stock that is crushing, what do you do?

You start panicking and you start selling because you want to minimize your losses.

So if this entire situation could lead to a dominant effect, it could actually end up disastrously, especially when the United States is picking a huge fight with China and China has so much leverage over the United States.

So if the United States is going to push China to massively sell off their treasury bills and the US dollars, it could actually end up badly for the United States.

And finally, that is certainly going to lead to increase in asset prices.

Any moment that you see that inflation is rising, any moment that you see that the dollar is becoming weaker, that will directly impact the asset prices in the market.

So house prices, for example, are going to rise.