Name: Countries Are Quietly Rejecting US Dollar as The Dollar is Collapsing
Uploaded: 2025-10-13T07:34:16.000Z
Duration: 19 min 10 s
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We are on the brink of another major shift in the global financial system, the system that has ruled the world over the last eight years.

Modal verbs - B1

For some people this might seem like an exaggeration, but

this is the greatest threat the US Dollar has ever faced.

For some people this might not seem clear.

The world has been talking about the changing world order over the last 20 years, but

However, if you pay a very close attention, it is happening right in front of us and it will continue happening.

So let me show you step by step how the global financial system is changing and how it will continue changing to a completely different system where the US Dollar is no longer the global reserve currency.

If you look at the data, you will find out that the US Dollar is still the most powerful currency in the world because almost 58% of the global reserve currency is in dollars.

The only real competitor the dollar has is the Euro that stands at around 20%.

That number has been fluctuating over the last couple of years.

The real danger that the dollar has faced once was back in 1980s and 1990s when the US dollar as the global reserve currency fell below 50% to 47%.

So if you compare it to today's numbers, it seems like the United States only became powerful.

But that only happened because the United States almost lost the competition to Japan.

As the world's largest economy, the dollar was too powerful.

So Ronald Reagan signed an agreement at a Plaza Accord with other major countries that they will devalue the dollar.

The so when the dollar was devalued, the Japanese economy turned into a bubble.

And if you take it at value basis, then the dollar was then the dollar amounted to a smaller share of the global reserve currency.

The Japanese economy collapsed and by the year 2000 it almost represented 71%.

The real difference that you can find out is by looking at the numbers historically because in 1965 and 1970s, 85% of the global reserve currencies were in dollars.

So this was the dollar that dominated the entire world.

And all other currencies, including the British pound that was the previous global reserve currency only represented around 11% of the global reserve currencies.

And this is very interesting scenario that between 1965 to 1975, the British pound lost half of its global reserve currency and it fell from 25% to as low as 11%.

What is more interesting is the dollar that represented almost 85% back in 1970s.

Today it fell to 57% and the trend is very clear.

With each consecutive year, the dollar's role in the global financial system is becoming less and less relevant.

The real question is, why do we need the global reserve currency in the first place?

When we understand this, the then we understand which currency will be the next global reserve currency.

There are four fundamental reasons why we absolutely need the global reserve currency.

When you're trading within the borders of any country, let's take China, you can use the local currency.

Inside China, everybody uses the Chinese yuan.

Inside Canada, everybody uses the Canadian dollars.

Inside the United States, you can use the US Dollar.

But what if countries want to trade with one another?

What if you want to bring bananas from South America?

What if you want to bring iPhones from China?

That's when you need the global reserve currency so that these countries can trade with one another.

The second reason is paying off foreign debt.

Countries often borrow money from one another, especially when they are in a financial crisis.

And paying you in your local currency that you can print is unsustainable.

Which is why everybody wants a currency that is so stable, that is so huge, nobody is worried that currency is going to collapse anytime soon.

The third reason is to stabilize your own currency.

Imagine you have a little small country such as Singapore, and they have their own currency.

Yes, Singapore is a very successful country, especially economically.

However, it's a tiny country with a GDP of about 200 to $300 billion.

And for them to stabilize their currency in the forex market, they need another currency that they can trust so that they can keep it as a reserve for.

So when they need it, they can use it to buy and sell their own currency in such a way that they will stabilize their currency in the forex market.

And you can't be using any random currency.

You need to use the currency that you can trust.

And that's the currency that we call the global reserve currency.

And finally, because everybody wants to invest, there is so much wealth in the world, there are so many rich people in the world, and

nobody wants to simply sit on their cash.

There's so many people who want to become rich.

And in order to invest in different currencies, in order to invest in different countries, you need one single currency, or at least a currency that you can trust and investors from all across the globe can trust so they can start investing.

And the only currency today that can fill all of these four requirements is the US Dollar.

However, the dollar is on track and it's falling down.

So this is exactly most likely that it's going to happen by 2030 because more and countries are rejecting the dollar.

More and more countries are moving to different currencies, and that's because the US Debt is becoming unsustainable.

Now, for some people, the US Debt is not a problem.

But if you cannot pay off your debt, if you cannot pay off the interest on your debt, that's when things get out of control.

When you borrow money in the beginning, it's not a big deal.

But when you have borrowed so much money that you can barely afford the interest on your debts, that's when the people who loaned you that money will get worried about you.

Imagine you're making $100,000 and you have a mortgage, you have a car loan, and

if you take all of your interest payments, they would amount to $10,000 a year.

Investors won't actually be worried at this point because that's 10% of your annual income.

But then suddenly, when your debts grow so much, when you have to pay half of your income into interest payments, that's when investors will think about, should we actually loan you more money because you can't afford your current debts?

If you look at the trajectory, the US debt is going to cross $45 trillion by 2035, currently is about 38 or $39 trillion.

And the trajectory that by the end of the next year it will cross $41 trillion.

And we have another few years where it will cross $45 trillion.

And this is the most conservative number.

According to other estimates, there is a probability that this number will exceed 4, 45 trillion dollars.

But let's be a bit more conservative and a bit more optimistic.

Given the fact that the average interest rate on the US debt is 3.4%, the total interest payments will be $1.5 trillion.

Last year and this year the interest payments amounted to a total amount of $1 trillion.

Within the next five years, we're moving to $1.5 trillion.

And this is not the amount of debts that you are paying.

This is simply the interest in order for the to avoid a default.

And that will equal to almost a quarter of all the government revenue that the US Government is generating from taxes.

Because the total revenue is expected to be about $6.5 trillion by 2035.

it has already been happening for the last couple of years, more and more countries are trying to use different currencies in international trade.

You hear the news that there are countries that use the yuan when they trade with.

There are countries that are literally selling their oil in euros instead of the dollar.

And that trajectory will continue, which means that the role of the dollar and the global trade is only going to diminish.

But the United States is not going to lose its status the global reserve currency.

And it will continue holding around 50 to 60% of the share of the global reserve currency.

It might fall by a couple of percentages, but most likely that's not going to happen.

The real change is happened between 2030 and 2035.

This is the breaking point in the United States history because the US debt is expected to cross $60 trillion.

This is when investors will look at the US debt and they're like, we no longer trust the United States.

So the average interest rate on the US debt most likely is going to grow to 4%.

Because with this kind of debt, investors will require slightly higher interest rates.

And because we are entering this new phase of high inflation rate, it is very normal for investors to demand a 4% interest rate.