Name: If this happens…The dollar will collapse
Uploaded: 2025-08-27T17:55:27.000Z
Duration: 9 min 10 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

This is the most dangerous period in the history of the dollar.

If this is going to continue, the dollar is going to break up.

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What makes the dollar the global reserve currency is because it's independent from the white house.

So investors from all across the globe trust the dollar and trust the federal reserve.

So Donald Trump, who is now pressuring the federal reserve, is playing with fire.

Now it doesn't matter whether you like him or you hate him, that's a completely different question.

Investors must be confident that the federal reserve is independent to continue buying US treasurer bills.

And if you think that I am exaggerating that it can possibly collapse, then watch the video till the end, I am going to explain.

The federal reserve has a very complicated system for a reason because it must be independent.

At the same time, it is being governed by 3 different entities.

The people who govern the fed are being appointed by the president of the United States, but the president cannot easily appoint anybody he wants because he will appoint somebody who will follow the orders of the president, which is why the governors must be confirmed by the senate.

That's how we ensure the independence of the fed.

At the same time, the owners of the fed are the largest banks in the country, so everybody has a huge stake in the federal reserve because the fed controls the dollar and the dollar is the backbone of the bond market and the bond market is the backbone of the US economy, which is why it's extremely important for the fed to be independent.

On one side, we have investors who are willing to make a lot of money.

Why would you invest in any kind of a project?

Because you want your money to grow, you want to make a real return on your money.

But if the president of the united states has full control over the federal reserve and the federal reserve will lower interest rates even though that inflation is high and inflation grows to 5 percent and the government is providing you with 5 percent yields on your investment, then you are not making any money or whatsoever.

But because you, as an investor, believe that the fed is independent, you are not actually worried about that and you easily go and invest in the US bond market.

However, that is against the interest of the president because the president wants cheap debt, especially now when the US budget is running a 2 trillion dollar deficit and 1 trillion of that is being spent on interest payment because the debt has grown to 37 trillion dollars.

So for this system to work, the fed must be independent.

If the president takes control of the federal reserve, the federal reserve will lower interest rates which means that the bond market will start offering lower rates.

However, most of the bond market is being held by investors.

Investors want to know that their money is safe and confident.

Investors want to make sure that their money is growing, so they will start selling massively their treasury bills.

And who is going to buy them if nobody is buying them?

But that is going to cause massive inflation because where the fed will take the money from to give it to investors, it is going to print it, and that's what causes massive inflation.

You see, whenever there is huge inflation, the first people it's going to impact are the average people, especially the poor people.

If you are rich, if you have millions of dollars, if you have stocks in the stock market, if you have real estate, the price of your assets will start rising alongside the new supply of money.

And because 90% of the entire stock market is being owned by the top 10%, investors are not worried because they will keep making more money.

The prices of essentials are going to rise, so the quality of your life is going to go down.

You are essentially going to become much poorer because of that high inflation.

And that's why the senate must confirm that the fed is independent and the fed is being governed by people who are going to care about inflation and not by what the president of the united states wants.

Donald Trump has already criticized Jay Paul with everything he could possibly can.

He called him with every name in the book.

He also went behind the renovation of the fed.

The building is around 100 years old and there was a planned renovation and now they are trying to accuse him of mismanaging that project.

But that's already in the past because the new crisis is that Donald Trump is attacking one of the governors of the federal reserve, her name is Lisa Cook, and she is a democrat.

By pressuring her, Donald Trump is setting an example that during the next fed meeting, if you are not going to vote to lower interest rates, then that kind of pressure could be on you as well.

So it doesn't matter whether she will be fired or not because I don't know at this point he signed an executive order that she will be fired but he cannot possibly just easily fire her.

But by creating so much pressure during the next meeting of the fed, some of these fed governors might want to avoid such a pressure on themselves so they might actually vote on lowering interest rates.

And that could question the independence of the fed.

That leaves fed governors with two options, step down or submit to the will of the white house.

If you look at 30-year government bonds, they are already rising, they are almost 5 percent even though that the interest rates that are set by the fed are about 4.5 percent.

There isn't enough demand on the other side for these 30-year treasury bills.

And about 20 percent or 15 to 20 percent of US national debt are 30-year government bonds.

If you lower further interest rates to 3.5 percent that means that investors would expect even more inflation in the long run which means that they will only buy the treasury bills if the government will provide much higher yield on these government bonds, which is going to increase the cost of servicing the debt.

Or the fed will simply step in and will create the artificial demand but that will cause inflation as I have explained earlier.

The real question is that, why is that not affecting the market?

The S&P 500 is growing, the Nasdaq 100 are also growing.

There could be multiple explanations why the market is not taking it seriously, why the market is not worried about the independence of the fed.

First of all, the market is focused on short-term gains.

There is so much money to be made in the short run, so nobody wants to miss that opportunity.

So hedge funds, huge financial institutions, everybody is simply focused on making as much money as possible today.

Secondly, nobody wants the bubble to burst.

There is a small bubble, or not even a small bubble, but we have created an AI bubble in the market.

This bubble is not as big as the bubble of 2008 or the bubble of 2001 when dot com or internet companies turned into a bubble.

But certainly, there is a bubble no matter how you look at it.

Since we have spent so much money on AI technologies, since we have spent so much money on developing AI, that the entire market has turned into a bubble.

I mean, these entire stock prices right now in the market are not being backed by real earnings behind them, which means that at a certain time in the future, stock prices must adjust.

Either earnings are going to grow to adjust to reflect the stock prices, or stock prices will come down to reflect the earnings in the market.

So if huge investors will start off their stocks, that could lead the bubble to burst, which could lead to a domino effect, which could crush the entire market.

The third explanation could be is that the market is being distracted by the AI.

The AI revolution is one of the revolutions that is going to change the course of history.

So everybody is thinking about how they can position themselves perfectly, which stock should they keep buying now so that they will profit out of it.

Investors are very distracted by the AI, they want to make as much money as possible out of it, so nobody cares about the independence of the Fed, at least in the short run.

Especially after the liberation day, after the 2nd of April, investors are a bit flexible about what Donald Trump is actually saying or he is doing.

If that happens, it will seriously harm the dollar as the global reserve currency.

But if that happens, and if you are invested in the right assets, then you are going to profit out of it.

For example, more and more investors now selling off their treasurer bills and moving those investments either to gold, and that's why you see gold prices are rising, or moving it to the stock market, and that's why stock prices are rising.

That could actually be another explanation.

Because if you are invested in real companies who produce real value, who produce real things in the market, it doesn't matter what happens to everything else, the value of your assets will continue rising.

Thanks for watching and I will see you in the next one.

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If this happens…The dollar will collapse

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