Name: A Once in a Lifetime Economic Disaster is Coming
Uploaded: 2026-01-21T18:00:56.000Z
Duration: 15 min 19 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...

The superlative

This is the biggest threat the dollar has faced since 1945.

Europe and the UK are the major reasons why the United States dollar is the global reserve currency.

At first glance, it seems like the Europe and the UK need the United States.

But the reality is that without them, the US Dollar is not going to be the global reserve currency.

The total GDP of the European Union is $19.4 trillion.

If you combine it with the GDP of the United Kingdom, that's $3.6 trillion, which gives them a total GDP of almost $25 trillion.

But if you look at the purchasing power parity, their GDP is far bigger than that, which stands at $33.7 trillion, while the total GDP of the United states as of 2026 is $31 trillion.

So if we combine the GDP of the European Union and the UK in US dollars alongside the US economy, that's about $56 trillion.

Now, the real question is, what is the total GDP of the world?

So if you combine the US economy with the European Union and the UK, that's almost 50% of the global economy.

And if 50% of the global economy is using the dollar as the reserve currency or as the main currency to do international trade, that sets the standard for the rest of the world to use the dollar as the reserve currency, to use the dollar in international transactions.

If you suddenly remove the United Kingdom and the European Union, and

they are not allies of the United States, the real question is what percentage of the global economy is going to use the dollar as the global reserve currency?

Only the United States, and that's literally 25% of the global GDP.

In fact, if you pay a very close attention of how the EU and the UK do trade internationally, you will see that they're primarily using the dollar.

Now, I don't mean the internal trade between the European countries, but

rather when the European countries are trading with other nations.

For example, when they trade with the United States, obviously they always use the dollar.

But when they also trade with countries such as China, they use the dollar.

And China does not mind that, because when China sees that 50% of the global economy is using the dollar, China would adjust and China would simply accept the dollar.

European Union are also using the United States dollar as the currency to trade with Asian countries, with Middle Eastern countries every time they're buying oil and gas.

And now you can see that even, even though that the United States economy is the world's largest economy, but

European economies reinforce the dollar to be the global Reserve currency.

If tomorrow European countries will start using their own currency as the global reserve currency, or they will be using the Chinese Yuan, suddenly the dynamic is going to change and the dollar is no longer going to be as powerful as it has been since 1945.

And this is another major reason that keeps the dollar to be the global reserve currency is that every major commodity is denominated in US Dollars.

When you look at the price of oil or the price of silver or the price of gold, they're always priced or denominated in the US Dollar.

So if we are denominating oil in the US dollar, guess which currency is more convenient to do trade with.

Because if we are measuring the quality or the value of oil in the US Dollars, why would we exchange that to the euro?

It's far easier to simply pay that in dollar because we measure it in the US Dollar.

The same thing applies to gold, silver and every other major commodity.

And the fact that the European countries alongside the UK agreed to use the dollar gives the US Dollar enormous power on the international stage.

Now, another major reasons that keeps the dollar as the global reserve currency is the treasury market is the backbone of the global economy.

Without a large enough treasury market, global trade is literally impossible because companies, businesses and banks and even countries are using Treasuries as savings without losing value.

If you are doing international trade, you need to have a lot of money in the bank.

But if you have fiat currency, which loses value to inflation consistently, you don't want to keep a lot of paper money.

But if that paper money is invested in Treasuries that you can very easily turn into cash whenever you want, then suddenly you want to hold a lot of fiat money.

Suddenly you want to hold a lot of US treasuries.

Yes, there is a 3% inflation, but you can actually make 3.6% by holding the US treasuries.

So you are comfortable to hold trillions of dollars of the U.S.

treasuries because you know for a fact that you can instantly convert them into real cash the next day or, or the exact same day and do international trade.

Which is why treasury market makes global transactions possible.

If you pull out the financial statements of any major company, you will see that all of them have a lot of debt.

Because debt basically is the engine of the global trade.

When large companies and even small businesses, they do business, they don't use their own money.

They usually borrow money from the banks, invest it.

When that project starts to make money, they start paying off the interest or the debt.

In fact, sometimes these companies don't even pay back the debt, but

rather they keep a healthy debt as long as they can ensure they can make the interest payments on that debt.

Now the question is that what is going to be the standard interest rate?

Who is going to set the global interest rate for the entire world?

It is very difficult to do that when every single country has a completely different interest rate.

Yes, of course every country has a completely different interest rate, but

you want a large enough market that is going to set the standard for the wealth.

And because European countries and the United States are half of the global GDP, and

the European countries alongside the UK agree to use the US Dollar, the US treasury market simply sets the standard for interest rates globally.

U.S. treasuries are also used as a collateral to be able to borrow money.

When a US Company wants to borrow money from a Japanese bank to open a factory in Japan or open a new branch in Japan, they don't always use their own money.

So they would rather go to a Japanese bank, borrow money from the Japanese bank, build that factory, open that branch.

When that project starts making money, they will start paying the Japanese bank.

But why would this Japanese bank even trust the US Company?

There should be a collateral so that if that US Company won't be able to pay back the Japanese bank, the Japanese bank can take this collateral and exchange it for the US Dollars.

And the best collateral in the world are the U.S. treasuries.

And that's why every single major company in the world holds, holds a lot of US Treasuries.

Not because they're holding them as investments for themselves, but

rather every time they need to borrow money, they borrow money against the Treasuries that they're actually holding.

And at the same time, they're not worried of inflation because they know that these Treasuries are earning enough interest rates and interest rates that is higher than the inflation rate.

European Union has the option to build their own unified debt market.

If you look at the treasury market of the European Union, you will see that every single country within the union has its own debt market.

So you have German Treasuries or the German bonds, you have the Italian bonds, you have the Spanish bonds.

And the reason that euro cannot be used as the global reserve currency is because there isn't one unified treasury market that could back the European currency.

Building one debt market is very difficult because if France is going to borrow money with these bonds and then France defaults, then Germany has to rescue France and Vice versa.

And that applies to every single country in the European Union.

So the European Union made a really great deal with the United States.

European Union is not going to build its own bond market because it's extremely difficult.

At the same time, it is going to rely on the US treasury market.

And because half of the global GDP now uses the US treasury market, that sets the standard for the rest of the world and reinforces the dollar as the global reserve currency.

Now, hypothetically, European countries can actually build their own bond market and that would compete with the US Market.

They won't directly go into the United States, but

rather they will start using the euro much more often as the reserve currency because now there is a bond market that is going to back euro.

And that's why the European Union alongside the EU are holding $2.3 trillion in the US Treasuries.

In fact, 40% of all the foreign holdings of the US Treasuries are hold by the European Union, which is.

Or the UK Because European Union is doing a lot of trade internationally and they need a lot of U.S.

treasuries in order to hold them either as collateral and to make it possible for them to do international trade.

The more countries, the more people hold the US Treasuries, the more capital flows into the United States and the faster the US Economy grows, which means that it's going to attract more investments, which is why the European countries are also investing trillions of dollars in the US Equity market.

According to the latest data, it's far more than $6 trillion.

Therefore, the entire European banking system runs on the US dollar.

So European banking system entirely depends on the United States because they made a decision to rely on the United States instead of building their own bond market.

Now, if the United States wants to sanction in the country, if the United States wants to do whatever it wants, the European countries have no other option but to align their interests with with the US Interest because it's the US Financial markets.

And you're using the US Financial markets, yes, you are reinforcing it.

But then you have to reinforce your interest to be aligned with the United States.

You cannot possibly be dependent entirely on the US Financial system while you have different interests from the United States.

And that's why since 1945, European countries have been aligning every single interest they have with the United States because they've been relying on the US treasury market.

But now all of that is suddenly shifting.

If you've been paying attention to what the leaders have been saying, At Davos.

Europe just said that they no longer can trust the United States, which is why they should no longer rely on the United States.

First of all, because the United States is threatening to take Greenland with force.