At some point in the possibly near future, the rest of the world is going to look at the American dollar and say, “To heck with this”, and presto, we will no longer be the reserve currency of the world. It’s going to go one of two ways. The first choice is the dollar will fold into what will be called the Amero, as the official currency of Canada, Mexico, and the United States. But there’s a chance the dollar could crash internationally before the Amero even gets off the ground, and the nations of the world will choose a new reserve denomination for global trade.
How will this effect the United States?
It’s not going to be pretty, that’s for sure. We can look back 80 or so years ago for precedent when the English sterling was dethroned in favor or the surging dollar. Funny how history repeats itself. Back then, England was in terrible shape for many years. They couldn’t borrow as much money as they wanted. For a while no one would lend them money at all. Right now, the United States is the largest debtor nation in history. Think it’s going to hurt much when suddenly no one will lend us money? Sure, we can print up some more of that pretty green paper and toss it in the air like confetti. That’s about what it will be worth.
Hello Zimbabwe.
Maybe it won’t be as bad as all that though. America occupies a unique historical position as the brand of choice when it comes to freedom, stability and the world’s Brinks truck (thanks, Jason, for that nifty phrase). Currency change, (if and when it comes) will likely be a long, slow process and there will be more than enough time for smart income property investors to adapt. At this point, be glad you’re not in the stock market.
