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Check our app for details. Ralph's, fresh for everyone. Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge, skills, insight, and encouragement you need to live a rich and meaningful life now while building a plan for financial freedom in 10 years or less. My name is Joshua Sheets.

Today is Wednesday, April 5, 2023. Today on the show, I want to discuss the potential for the U.S. dollar to lose its status as the world's reserve currency. There have been various news articles and various chatter that I have been observing online that seems to be, as best I can tell, seems to be sparked in this most recent iteration by a recent announcement from the nations of China and Brazil that evidently they're going to do some form of trade deal in their own currencies.

And people are taking this and extrapolating out from it. I'll cover that more in just a moment. Now, the short version is quite simply that I don't think this is really anything new. I have been paying attention to finance for, I guess call it 15 to 20 years now.

And in that period of time, I have consumed hundreds, perhaps hundreds of careful articles analyzing and predicting the doom of the U.S. dollar. And during my entire lifetime, those articles have all come to naught. Now, that doesn't obviously mean that they couldn't actually come to something. But today I want to try to present a series of arguments as to why it's unlikely to come to be a problem.

So the outline of the show, the TLDL, too long, didn't listen, is quite simply this. I'm not particularly concerned about the U.S. dollar losing its status as the world reserve currency. I'm less concerned about this idea today than I was four or five years ago, primarily due to my own personal experience.

I'm gonna present some arguments as to why the U.S. dollar is going to continue to be the world's reserve currency for a good long time. But then I'm gonna share with you towards the back half of the show, how to hedge your bets and how to be protected in case I am wrong.

So let's just read a couple of headlines here to set the stage. I went onto Google News, I searched dollar to try to find some bricks. I searched for bricks, currency, et cetera. Most, this doesn't seem to be a particularly mainstream thing. There's not a lot being talked about in any kind of large mainstream newspapers.

Wall Street Journal, New York Times, Washington Post, et cetera, not a big feature. Now we can find a few articles, for example, here's one on Schiff Gold, Peter Schiff's company, headline, "Bricks Nations Developing 'New Currency' as Quest for Global Dedolorization Accelerates." First couple of paragraphs, "China and Brazil recently finalized a trade deal in their own currencies, completely bypassing the dollar, but that's not the only bad news for the world's reserve currency.

Last week, a Russian official announced that the bricks nations are working to develop a, quote, 'new currency,' yet another sign that dollar dominance is waning. State Duma, the Russian Legislative Assembly, Deputy Chairman Alexander Babakov, said the transition to settlements in national currencies is the first step. We've already seen this occur with recent oil deals between India and Russia being settled in currencies other than dollars, et cetera.

The articles go on. If we, here's a DW article, Deutsche Welle from Germany, business, Brazil, March 27 is the date, "A new world order? Bricks nations offer alternative to the West. Predictions about the bricks countries as the fastest growing economies haven't quite panned out. Instead, the alliance is now offering a diplomatic forum and development financing outside of the Western mainstream." It talks a little bit about the currency and challenging the World Bank model, et cetera.

Here's a website that's called First Post. It seems to be an Indian website. I haven't dug into it deeply, but it seems to be an Indian news site of some kind. Headline, "Dumping the dollar. Will a new bricks currency replace the US currency for trade? The bricks collective comprising Brazil, Russia, India, China, and South America is working on a common currency in an attempt to ditch the US dollar and push back against America's dominance.

The move comes as Moscow and Beijing call for de-dollarization in the face of Western sanctions." There are others, but you get the idea. Now, the question is, how do you, there are always news headlines. And if you're new to this, if you are super passionate about this, I wanna caution you that you need some perspective.

And so I'm not quite yet an OG in the finance space, but I'll probably be there pretty soon. And I have observed a significant change, in my thinking over the years, as I have been involved in this space. When I was younger, I would take these articles and these news, I'd freak out, consider that they're certain, et cetera.

And today I'm filled with a whole long list of questions to try to understand what is, you know, to try to understand what to do and how to judge the veracity of headlines. Remember that newspaper headlines are basically propaganda. And so it's easy to announce that you are, it's easy to announce that you're exploring a new currency for the BRICS nations.

That's wonderful, and that's a great propaganda effort. To actually create and implement a currency, that's another thing. It's like, it's easy for a 20-year-old guy to announce that he's exploring for a supermodel wife, but to actually bring it to fruition is a very different thing. And if you look at the old guys in the finance space, what I observe, people who are seasoned or experienced investors, what I observe is, it's not that they discount the possibility of, say, for example, the US dollar losing its World Reserve currency status.

They don't discount the possibility. Of course it's possible. But that they put it into perspective to say, all right, what's gonna replace it and how and why? For example, here was Nassim Taleb's tweet today. He says, "You will only start worrying "about the dollar status as a reserve currency "when you see long lines outside the Brazilian, "Russian, Iranian, and Chinese consulates "full of young professionals seeking immigration visas." And it's a pretty fair argument, meaning seeking immigration visas to go from the United States to those nations.

Now, having stood in multiple immigration lines to leave the United States and go to some of these places, I look at it and I realize that, hey, there are people who are doing it. But my years being outside of the United States have come to cause me to actually appreciate the United States, the US dollar, more than ever before.

And so I say to you, as someone who, again, at one point was very concerned about the collapse of the US dollar, I don't like that word, I'm using it for dramatic effect, but paid a lot of attention to these kinds of arguments. Today, I look at the world from a different perspective, having lived outside the United States, and I want most of my money in dollars.

Not all of it, which we'll get to in the second half, but I want most of my money in dollars. Now, some months ago, about three months ago, I happened to listen to a presentation, a video, a YouTube video, by Peter Zaihan called "Global Currency, The Dollar Ain't Going Nowhere." Now, Zaihan is someone who I have mentioned repeatedly in past months, listener of the show turned me on to him.

My first book of his that I read was his most recent one called "The End of the World As We Know It As Just the Beginning." I found it quite powerful and persuasive, and I appreciated him presenting a series of clear arguments that I was able to factor into my own thinking.

Because he's clear on his reasons and his arguments, it gives me good data to think about. Since that time, I have gone back and finished all of his previous books. In fact, just yesterday, I finished reading the last of his books that I had not previously read. And I don't think that's necessary, by the way, for most people.

I like to do it 'cause I like to understand where someone's coming from. I like to understand where someone has been right and wrong and try to understand what someone's perspective is. And I think I now have a pretty good understanding of what his particular opinions are. But I thought that, as I've spoken with people in real life about their concerns about the collapse of the dollar, et cetera, I have found myself turning several times to this video that he created.

It's eight minutes long and his discussion of the subject. And I think it's a powerful discussion because he gives good arguments that we need to consider. So I'm gonna begin today, not by talking about all those Zaihan books, but actually one more comment. I would say that one of the things that's interesting, his predictions over the last, I think it was about eight years of writing, that I have consumed of his, are fairly consistent.

Many of them have come true, not all of them. But his method and his model that he has presented is clear and straightforward and is a very useful mental model to consider. Now, we're not gonna dig into all of the depths of that stuff. I'm not gonna put four books into this show.

I'm saying that I respect his analysis and his ability to quickly and clearly present arguments. Let's begin the video here by Peter Zaihan. - Zaihan here coming to you from Colorado where eight inches of snow turned into 16 to 18 because you know, mountains. Now, today I wanted to talk to you about global currencies.

Every few months to couple of years, a new conventional wisdom takes hold that the United States is in its final years, if not final months, and some big political thing is gonna happen that is gonna dethrone the US dollar as the global currency and all American power will unwind with that.

There is no part of that logic chain that has ever been correct, but these stories keep persisting because there is no shortage of people out there in the world who are anti-American and can't do math and have no sense of history. So here we are one more time. Now, let's begin right there.

This is what I have observed over my years of being involved in finance. And I've watched a lot of people get sucked into this. Remember that when you want to sell, sell an idea, sell a product, et cetera, one of the triggers that you can push is the trigger of fear.

Fear is a very powerful motivator. And when you have the ability to push on fear, you can cause people to take action. And so in the space where you get in, so if you want to sell something, if you can create fear, the fear can often, and urgency, then that can often cause people to take action to try to buy your product.

Now, there's an element of which this can be healthy. There are things, for example, that we try to put fear into people. I try to put fear into my children of cars. I want them, if they see a car moving around them and they hear motor, I want a motor that's on, or they see a driver who's in the car, I want them to be afraid of the car and turn and run away so they don't get run over.

And of course, there are many versions of that where we want to properly instill a fear, or if you don't like that word, a respect for it. But we also don't want to be manipulated by fear. And this is a space in which we are constantly subject to people trying to manipulate us with fear, and especially in the financial markets.

Where is this most prominent? Well, clearly, the sale of things like gold, silver, gold coins, silver coins, a lot of it is pushed by fear. Bitcoin, right? Use Bitcoin because the dollar is gonna lose its world reserve status. A significant amount of this is both fear and greed put together, which is a powerful combination.

The reason I say greed is everyone's hoping that their Bitcoin that they buy today becomes a hundred bagger, increases by 100X and they're super rich. Just like the same thing with gold coins. If the US dollar falls apart and it collapses, my gold coins are gonna be worth 100X.

And I had over the years, people tell me, you know, my little stash of silver is gonna be able to buy me five houses and I'm gonna be rich in the new economy. I think that it's fatally flawed, but this is just an expression of greed and fear. And you put these two together and people commit tons of irrational deeds.

Even in the, I see this a lot in the internationalization space. And again, I'm sort of involved in these markets. I talk about these topics, but a lot of it is played up on fear. Leave the United States 'cause the United States is gonna turn into a nightmare place and it's just gonna be hell on earth and it's better everywhere else 'cause the US dollar is gonna lose its status as the world's reserve currency.

And as Zaihan says here, he says it's never been true and it's not true. And he's gonna present his arguments as to why. I also believe that it has not been true. It is not true. And it is not likely to be true in the medium term, as long at or at least as far out as we can see.

Not the same possible. I insure against it. Notice I said insure, not plan for it. I insure against it, but I think it's improbable. So let's get into some specific arguments here. - Step one, US power is not a result of its position as the global currency. It's the other way around.

The global currency has to be able to impose by force, if necessary, some sort of packs on the trading system to allow trade to happen in the first place. And right now the US Navy is more powerful than that of all other navies combined by about a factor of seven.

And if you consider that the world's second and third most powerful expeditionary navies are the Japanese fleet and the British fleet, and you throw them in as American for this force projection factor, you're now talking in excess of 12 to one. So honestly, there's never been any math there.

And there's no danger to the US position from a strategic point of view. - All right, let's deal with that argument. (upbeat music) - California's top casino and entertainment destination is now your California to Vegas connection. Play at Yamava Resort and Casino at San Manuel to earn points, rewards, and complimentary experiences for the iconic Palms Casino Resort in Las Vegas.

Two destinations, one loyalty card. Visit yamava.com/palms to discover more. - First argument, the US dollar is not the source of American strength. Rather, the US dollar is the reserve currency because of American strength. And the simplest way to define strength as is using a military calculation as Zaihan does.

Many people believe that if the United States dollar lost its status as the world reserve currency, then the power of the United States would plummet on a world stage and that the entire country and economy would implode. And one thing I am very persuaded of by reading it a bazillion times in Zaihan's book is that that is not true.

The United States is one of the least involved countries in the world in terms of international trade. The United States doesn't really trade. It doesn't need to, doesn't want to. Basically, if you buy Zaihan's analysis, and again, backed up with facts and figures, you can look at the United States specifically, North America in a focused way, and the Western Hemisphere of all of the Americas as basically just a region that sits off by itself and doesn't really much care what happens in the rest of the world.

That is not the case for many other nations in the world. And so this is one of the things that makes the United States hard to predict. Basically, the United States has enabled internationalization over many decades now, but the United States has not really ever been involved in internationalization.

Basically, all the United States does is purchase the goods from around the world, which has helped other nations to build their economies and become strong and wealthy and powerful, but the United States has never really gotten that involved in international trade. This is, to me, one of the things that I missed for a long number of years, and I'm very grateful for my reading of all these books to put it into perspective.

I misunderstood how isolated and self-sufficient the United States is as a country. And it's really, really fascinating to think about and recognize where I missed it. One of the biggest things that I missed was even what happened in the shale revolution. Now, I knew the United States had become energy independent and was now an energy exporter, but I didn't understand the great fundamental transformation.

And this has been one of the huge keys to the transformation of the US system and even involvement in global affairs over the last decade. The United States has always been extraordinarily independent in terms of its ability to function as a nation due to its basic geography, wonderful, abundant farmland, great natural borders that protect it, surrounded by close allies, a great manufacturing tradition, great intellectual property tradition, et cetera.

The United States is basically, if you cut the United States off from the rest of the world today, 100%, the country would be fine. There would certainly be a recession. There would be hard times as companies go bankrupt, et cetera, but there's nothing fundamentally that couldn't be done. The country within its borders could make everything.

It has all the resources. There would be some missing rare earth elements and whatnot for lithium batteries. There are things that the country imports, but generally speaking, the country would be fine. The biggest thing it was missing for a long time was abundant energy as US oil flows diminished over time, and that was where the United States was involved for a time in securing its oil flows.

But since the shale revolution, the United States now has more energy than it needs for its own consumption. And one of the things that Zeihan is prone to point out is if you bring together North America and include Canada and Mexico, you have an incredibly powerful three-country conglomerate that has everything in abundance, abundant energy, abundant workers, et cetera.

It can basically cut itself off. So the United States doesn't derive its value from, excuse me, the US dollar does not derive its value from the fact that it is the world's reserve currency. Rather, it is the world's reserve currency because of the nation. Now, here's my example to try to make this more evident.

If you go into, if you say, "Okay, I want an alternative to the US dollar," and you're looking around for a competing currency, there are a handful of options that you can look at. Of course, there are many countries around the world that have currencies, hundreds of them, and you could go and you could participate in those countries' currencies.

But there are a few that will generally float to the top. Now, in terms of big ones that people would know, you might have a currency like the euro. That's not often a super popular alternative to the dollar. A lot, not very many people come and say, "I wanna take my money and put it in "from dollars into euros." And there are a few reasons for that because many of the issues that plague the dollar have plagued, affect the euro worse.

But there are a few that people are often common to. And one of them is, there are a few that people often really want that they mention. And one of those is the Swiss franc. I want you to think about what that represents. On an international stage, the reputation that the Swiss franc has is that of being a currency of a nation that is isolated, that is relatively independent, that is neutral, and that has a strong basic core to its economy.

That's the idea, that's the perception that exists. True or not, doesn't matter. That's the perception that exists. And I think the Swiss franc is fine in terms of as an alternative for some of your money. That's fine. But when you think about the Swiss franc, everything that is true about the Swiss franc in terms of the nation of Switzerland is true on a scale of 100 to the United States generally.

And that would be, I think, an important point to start with. The dollar is valuable because of the nation itself that is basically an isolated, independent, self-sustaining, autonomous nation that has everything it needs and has a huge economy that's just built around it. When you add in the military power argument and the fact that the US military is the military that has the ability to control everything militarily in the world, then it becomes much more powerful.

And that military component, while probably none of us love it, I don't love it myself as an American, I don't love what the US has done, I can see that sometimes good, sometimes bad, sometimes positive, sometimes negative, it's a mixed bag. But the truthfulness of it, since it is true that the United States is so, as Zahin said, is seven times bigger, the US Navy is seven times bigger than all the other navies of the world combined, you can see the level of military dominance.

And when you get into the world of money, you want your money to be from somebody who is militarily powerful and militarily dominant. Let's continue the analysis. From an economic point of view, the idea is that people, countries will just stop using it. And the scuttlebutt of the moment is that a number of countries are negotiating, or at least talking about publicly, joining the BRICS group.

Now, BRICS is a group of four large developing economies, Brazil, Russia, India, and China. It's a grouping that was put together by some finance guy back in the 2000s, and all he meant by it was, "Hey, look, these are four big countries "with big bond markets, "we might wanna consider trading these as a group." That's all he's ever thought about it.

But the leader of the BRICS countries do get together from time to time to shop. No meaningful policy has ever come out of it because these countries don't really trade. I mean, they all trade with China, of course, but they don't trade with one another. So there's a reason to caucus with Beijing, but the rest of it is just kind of fluff, always has been.

And so when I see stories about other countries such as South Africa or Argentina, or now Saudi Arabia, starting to join, I'm like, "Oh, this is really boring," because these countries really have nothing in common. But anyway, as the conspiratorial logic goes, if they stop using the US dollar, then the US is doomed.

Well, they'd have to start using something else. And none of them, none of them want to use each other's currencies because that would give that country a leg up. - So let's stop there. Recognize, if you're not gonna use the US dollar, what is the alternative? If you're not gonna use the US dollar, what is your alternative?

On a personal level, before we go to the country level where Zaihan is going, on a personal level, think about that right now. If you're not gonna use the US dollar, what is your alternative? If you're worried about the US dollar and you're not currently using an alternative, I don't believe that you're actually worried about it because any alternative that you think could replace the US dollar in the longterm is an alternative that you should be using today.

If you believe that the Chinese yuan is going to replace the US dollar as the world's reserve currency, then you should have a bank account in which you transact and you save money in yuan. If you believe that Bitcoin is going to replace the US dollar as the world's reserve currency, then your money should be not only stored in Bitcoin, but transacted in Bitcoin.

And while this is increasingly possible, for many years now, this has been the Achilles heel of the Bitcoin movement, is can we actually transact in Bitcoin? Are we transacting directly in Bitcoin for Bitcoin exchanges without going through the US dollar as an intermediary in our exchanges? If you believe that gold is going to replace the US dollar, then are you not only saving in gold, but are you transacting in gold?

If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin. If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin.

If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin. If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin.

If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin. If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin.

If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin. If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin.

If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin. If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin.

If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin. If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin.

If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin. If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin.

If you believe that the world's reserve currency is going to replace the US dollar as the world's reserve currency, then you should have a bank account in Bitcoin. This is interesting to me because this is where my family history is from. It's a great story, wonderful story. You should read it to your children.

It's called Little Britches Series by Ralph Moody. Father and I were ranchers. In this story, written decades and decades ago, Moody talks about this time in which there wasn't enough money available. He describes how one year there was plenty of money and all the farmers and ranchers were working for each other.

They would go and help each other bale hay and stack hay. They would get paid in money and there was money circulating the economy. But then something happened, and this was about 1905, and there wasn't any money available. He describes, without it being a focus of the story, he just describes in the terms of narrative how difficult that period was when there wasn't money available.

There wasn't money available for trade. It wasn't available. They couldn't interact with each other. So what they wound up doing is his family wound up actually being quite well off Comparatively speaking, previously they had been simply subsistence farmers and other people were richer than them because other people were working for money.

Well, his family became wealthier because they didn't have any money, but they did have stuff. But they were interacting with one another and they had to use IOUs, so men would come and work for them and he would have IOUs for their hay and their hay crop, etc. He describes it as being a very difficult time and a lot of people were wiped out.

And so it's interesting because this ties to something that I have thought about for years. When I was younger, I was very attracted to the idea of having a gold-backed currency. That always seemed like a great idea. Of course you would want something, you want money that's backed by something solid.

You want currency that's backed by something that is real, that is available. But what I didn't understand, and I still have a hard time articulating clearly in a teaching way, is to why the concept of a gold-backed currency was dropped in the first place. And if you can't defend this, if you can't say it clearly, then I think you have a hard time describing it.

Now, you can take the conspiratorial view. Well, we wanted to drop the gold-backed currency so that the government could spend money without limits. Okay, I'm open to that, but I find it hard to believe in just the hardcore conspiracy view of anything. I find it hard to believe that it just doesn't jive with my experience of human nature.

There may be always ulterior motives, etc., hidden motives. We all have that. But the hardcore conspiratorial perspective seems hard for me to justify. So what were the problems with a gold-backed currency? And how were those problems alleviated or intended to be alleviated by a fiat currency that has no fundamental backing?

And this sense of lubrication is one of those issues. Now, to point out what Zahan says is it's not just that you need a currency that has a size of trillions of dollars in our current number, but rather you need something that has that as excess in order to lubricate global trade.

So understand clearly that the scale of currency that is necessary to do global business, global transactions, etc., you need a huge amount of it. And that doesn't mean that your currency has to be in the tens of trillions. That means you have to be able to lubricate the exchange of tens of trillions.

Your currency needs to be even bigger, which gets us to probably the single biggest constraint on being a global currency. You have to not care what happens to the value of your currency in any given day. Because if there's a trade surge and demand of your currency goes up, then all of a sudden supply of your currency has plummeted and you're dealing with very real economic distortions at home.

This is, I think, a very important point that we need to talk about. Because there's a huge difference here between the American perspective and the global perspective. And this is something I appreciate very deeply now having lived outside of the United States for four years. Americans don't think about foreign exchanges in any meaningful way.

They don't pay much attention to it. Yes, it's an academic idea that you read an article in a financial publication about the strengthening of the dollar or the weakening of the dollar. But that makes no fundamental difference to the average American on a daily life. Because Americans earn in dollars, they bank in dollars, they spend in dollars, etc.

And yes, there is inflation. We all know that since its inception, the dollar has lost 97% of its value. We understand that. But at this point in time, inflation is well baked into the cake. It's just understood and assumed by all of us that our currency is going to inflate.

And so the average American doesn't care what the value of his currency is on a global stage. But if you go to almost any other country, everybody except the very poor understands what is happening in terms of exchange rates. Talk to your average Canadian, your average Canadian is going to have a pretty decent idea of the general range of the exchange rate between Canadian dollar and US dollar.

Talk to your average Mexican, they're going to have, again, not the very poor, but most international, kind of middle class and up people are going to have some connection of what the current value is of the Mexican dollar to the US dollar. And on and on it goes. And so this is, so the United States, you have to have, so what Zayhan's argument here is, you have to have a currency where nobody even cares.

And it's very hard, and that's one of the things that the United States government and the Federal Reserve has been able to do. They can manipulate the value, or they can allow the value to fluctuate massively, and nobody really cares. And the people don't care, and the government doesn't care, and the Federal Reserve doesn't care.

That's his point. And that's very different. And to be clear, that stems from, at its core, the relative isolation and independence of the United States. A nation that derives a lot of its income from trading with the United States would never have that degree of flexibility that the Americans themselves have.

- The value of your currency in any given day, because if there's a trade surge and demand of your currency goes up, then all of a sudden supply of your currency is plummeted and you're dealing with very real economic distortions at home. So your currency has to be so huge that you don't care that global exchange in it is moving around every day.

And that means you also need to be able to run a persistent trade deficit, because you have to be able to provide currency for everyone who wants to trade everywhere at any time, and you cannot sign off on each individual transaction. That makes the list down to one already, because the Europeans couldn't do it because they have to run a trade surplus because their demographics are so aged they will never be net importers again.

It can't be the Chinese. The Chinese are the most manipulated currency in human history. They print two to five times as much currency every month as the US Fed did at the height of our monetization programs in 2007 to 2008, and then again during COVID. Everything that everyone says is wrong with the US dollar is actually wrong with the Yuan by a factor of 10 more.

And every time the Chinese start to loosen up their capital controls in an attempt to have a bigger role for their currency internationally, a half a trillion to a trillion dollars of private savings floods out of the countries in a matter of months, and they have to slam that window shut again.

So, there is no reason to expect the US dollar to go anywhere. In fact, let me put this in historical terms. The need to have a large, liquid, stable currency maintained by a country that doesn't care what happens to it every day is so huge, so central to trade, that even at the height of the British-Spanish confrontations in the late colonial period, the Brits were using almost exclusively Spanish currency to lubricate their slaves' rum-finished goods trade triangle between the Caribbean colonies, the American colonies, and the British mainland.

I want you to take special note of that comment. Again, the comment is, hey, there's a war going on between the Spanish and the Brits, and yet still the Brits are using the Spanish currency in order to lubricate trade. Money is so integral to our system, that if we don't have enough money, then everything collapses, and you will use the money of your biggest competitor.

This is one of the things that you see all around the world. You go to whoever the biggest enemy of the United States is, in ideological terms, be it, I don't know, maybe Russia right now, or China, or Venezuela, or Cuba, etc. But I haven't traveled in all those nations, but in every one of those nations, the U.S.

dollar is incredibly valued by most people. In some cases, especially those in Latin America, it is the de facto currency that is used, even by those who are an ideological enemy. California's top casino and entertainment destination is now your California to Vegas connection. Play at Yamava Resort and Casino at San Manuel to earn points, rewards, and complimentary experiences for the iconic Palms Casino Resort in Las Vegas.

Two destinations, one loyalty card. Visit yamava.com/palms to discover more. Brits were using almost exclusively Spanish currency to lubricate their slaves' rum-finished goods trade triangle between the Caribbean colonies, the American colonies, and the British mainland. Another good example. At the height of the Vietnam War, the Vietnamese were using the U.S.

dollar in their international exchange because there was no option. You want a more recent example, look at what's going on with Russia. The Russians are under financial constraints right now, sanctions put on them by the Americans, the Europeans, and others. And so they tried to pull a lot of their petroleum earnings, which comes in in euros and dollars, and they tried to push it into Chinese yuan as kind of a stick it to the West.

Well, a few months later, they tried to then pull it out, and the Chinese were like, "Well, no, we really don't want these yuan back." And so the Russians just lost tens of billions of dollars. There is simply no example at any point through human history of the unit of exchange for global trade of anything other than the global hegemon and the largest economy writ large.

It's just not possible. Now, on this point, recognize this applies today in your own practical experience. There is one currency that you can spend in any country in the world today. That currency is the U.S. dollar. And I have proven this myself in every country I have been to.

There is one currency, and that is the U.S. dollar. When I travel, although I will often carry some money from a regional currency, which I'll get to in a moment, I always carry U.S. dollars, and I always carry U.S. dollars in small denominations. And there have been various times where I have settled bills.

You go to a restaurant, you don't-- if for whatever reason you're not using a card or the card doesn't work or whatever, then I'll pay in U.S. dollars. Now, I will usually often-- in some cases, they'll just accept it directly-- but in many cases, I'll just give a slight premium for it.

Hey, the bill would come out to $4 or $8 in exchange. I'll just pay $10. And if you bump up the exchange a little bit, the merchant is often very happy just to receive dollars. The point is that on a very real level, you can go around the world with one currency, and you can pay with U.S.

dollars. Until that changes, I don't see-- and that's the reason I'm talking in these terms. I'm not talking about settling international petroleum purchases. I'm talking about you and me with the scale that we can see with our eyes. Until that changes and the U.S. dollar is not desired by ordinary people, ordinary shopkeepers in any country in the world or in most countries of the world, the status of the U.S.

dollar as a reserve currency is not in question. Now, there are, of course, regional currencies. And so, for example, the euro is a powerful regional currency. You can take a euro, and you can spend it. It'll be accepted in many places around Europe, even if the euro is not the standard currency.

You can spend euros in a casual way in Switzerland or in Sweden or in Turkey, et cetera, because you're close enough to it. But the euro is not accepted in Latin America or in Asia the way that the dollar is. And so what I'm trying to do is give you just a very simple idea to back up Zahin's claim, which is on a big international space, with what you and I can see with our own eyes.

Point through human history of the unit of exchange for global trade being that of anything other than the global hegemon and the largest economy writ large. It's just not possible. I don't mean that to sound pro-American, because the Americans have been on the other side of this. During the War of 1812, when the Brits were very close to destroying the United States as a country, our unit of exchange internally was the British pound.

And if anything, as the world continues to deglobalize, you should expect the American position to entrench, because as global trade breaks down and goes into regional trade, you're going to have a series of regional hegemons who have tried to impose a bit of a PAX on their own neighborhood, and they will try to force everyone in their neighborhood to use that currency.

But all of those countries will have a vested interest in not doing that. And as long as the US dollar is available, you've got a more liquid, less politically problematic currency that doesn't swing wildly, that is not actively manipulated to achieve trade advantages, and that is going to be used instead.

So, I mean, for example, think about the Eastern Mediterranean. We're nearing a world where Turkey is going to be the central hub for all things in the Caucasus and the Middle East and the Eastern Med and the Balkans. They're going to try to get everyone to use the lira, but not everyone is going to want to use it because the Turks will, will, will use that authority in order to bind all these other economies more closely to them.

Anyway, like I said at the very beginning, there's no shortage of people who don't like Americans, who have no sense of math or history, who are always going to trot this up every few months. And it means as little today as it did then. All right, that's it for me.

Until next time. So there's the extent of Zaihan's video. I'll link to that in the comments if you want to see it. He is a world-class master at taking his background information and putting it into a short daily video. His YouTube channel is called Zaihan on Geopolitics. Wonderful, wonderful source of news.

I don't have a ton to add, other than to say, show me the alternative. Show me the alternative. And while I won't be sad for there to be alternatives, one of the opinions that I still hold, that kind of comes from the Austrian perspective on money, or on economics, is that currencies should compete with one another.

That anyone can create any currency they want for any reason and let them compete with one another. And in a limited way, I think that's what you see right now. You see that countries and currencies can compete with one another. But on that basis, there's not really, on an international competition front, there's not really any alternative to the US dollar.

What is the alternative? We'll know that there is an alternative when we see it being used, and when we see the growth. Until then, I think any predictions of the US dollar's long-term, losing its status as the world's reserve currency, are wildly overplayed. And they usually come from countries who are seeking to gain a propaganda edge by proliferating their message, or by companies or individuals who are seeking to sell something out of fear and greed, trying to simulate people's fear and greed.

As best I can see, the US dollar isn't going anywhere, and there's just no viable competitor at the moment to the US dollar. Now, does that mean you should do nothing and you should ignore this completely? I would say no, definitely not. And here are a few things that I think you should do.

Number one, while it may be true, you might accept it as true, as I do, that the US dollar is the world's reserve currency and it's going to continue to be the world's reserve currency, but that doesn't mean that it's that way forever. And so there may be value in owning other currencies.

Now, this is generally most obvious if you have some connection to another place. So, the Turkish lira has been greatly inflated recently. And so you wouldn't naturally go and say-- by the way, this is one of Zayhan's predictions-- that Turkey is an up-and-coming superpower, a regional superpower, for various reasons.

I think he's probably right. But that doesn't automatically mean that you would go and invest all of your money into the Turkish lira if you don't have any connection to Turkey. But on the other hand, if you do have a connection to Turkey in some way, then, of course, some of your assets would be exposed to that.

And whether that is Turkish banking deposits, Turkish investments, Turkish real estate, etc., you are going to pay more attention if you have a connection to that corner of the world. So if there is another currency that is represented to something that you have a connection with, then obviously consider pursuing it.

It could be Canadian dollar, it could be euro, it could be Turkish lira, it could be Colombian peso, whatever it is. If you have a connection to a place, then obviously exposing some of your money and your investment structure to a local currency is going to be helpful. What you need to know, though, is quite simply this.

The majority of the wealthy people in that country are trying to do the opposite of what you're doing. They want to have just enough money in the Turkish lira in order for them to grease the necessary financial accounts for their business, their investments, etc., and they want to have exposure to long-term appreciation, but they want the bulk of their money denominated in dollars to protect their money.

So if you're in the United States and 100% of your money is in dollars, recognize that most of the world is sitting and looking at you with envy about how you get to enjoy this highly stable currency backed by this incredible titanic power, etc. So I think it's wise for you to consider diversifying some of your money, but recognize that it's probably of a lower priority for you than if you're Lebanese and you're trying to figure out how to protect your money.

The path at this point in time is fairly obvious for most people that the U.S. dollar is the preferred alternative, and that's not due to--again, that's due to what the United States represents, not due to them forcing it on the world. Are there good alternatives to it? Absolutely. I think that it's perfectly reasonable for you to bank in other currencies and to have exposure to other currencies.

So whether you keep accounts in Singapore, in the Singapore dollar, or again, Switzerland in the Swiss franc, or in Great Britain with the pound, really any number of these are okay, even if they're rather smaller currencies, right? The Swedish kroner or something like that, where, okay, there's a relatively small currency, but it has some independence, that can be a great move for protecting some of your money.

Just like owning some gold coins that you keep in your safe or in your safety deposit box or in storage in another country, this is a great insurance play. But don't think that that's not appropriate for all of your money. If you have a million U.S. dollars and you're actively involved in business and you just say, "I'm going to go put all this money into gold coins held in offshore cold storage somewhere," that would be a really bad move.

And I think the same thing, especially when we come to other potentially global options. So many people want to get out of a regional option. They say, "What's a global option?" Well, in a digital world, maybe there's a digital alternative. This is the argument in favor of bitcoins, the argument some people put in favor of other cryptocurrencies.

And while these things have been beaten up massively, there is probably an increasing relevance for these in the future because we are living in a world-- So think about where we've come from. There was a day and age in which the British were running their empire with the Spanish doubloon being the currency of exchange.

That's the reason why, incidentally, we have what's called the Treasure Coast in South Florida, where I'm from. The Treasure Coast is called this because of all of the Spanish shipwrecks, all the shipwrecks, where the boats were full of gold. All the gold and the gold coins going all around is what made these spectacular shipwrecks.

So there was a day in which they literally had to transact in gold coins. Then you had the development of paper currencies, and you had various IOUs that became paper notes. And then those notes at one point were connected to, anchored to some sort of limiting factor. So if you had a $20 bill, but that was redeemable for gold upon presentation, then that was disconnected.

So this money was traded on a global basis. And then it was paper money. So you had pallets of bills going around the world. And while there are still pallets of bills moving around the world-- I forget the numbers, but I think it's probably half of all U.S. currency is outside of the United States-- but now it's just digits on a screen.

It's just a form of accounting of digits on a screen. So I don't deny that we could invent beautiful new digital systems of accounting. That's possible. I just simply deny that they're currently a significant factor in global trade or in most people's personal lives. But if the marketing efforts continue and people continue to believe in them and they start to use them over time, who knows?

Five years from now, 15 years from now, they could be more and more of a factor in our lives. We don't know. And so having exposure to those is smart. Please, and I have a course, right? BitcoinPrivacyCourse.com. By the way, there haven't been enough of you going and getting that.

So if you haven't gotten my Bitcoin course, go to BitcoinPrivacyCourse.com. Learn how to buy Bitcoin completely anonymously. Learn how to own it. Learn how to use it, etc., without any ties to your names. It's a fabulous, fabulous tool. But don't put all your money in Bitcoin, please. The U.S.

dollar is a better bet for most of your money. Make your moves, but don't put all your money into Bitcoin. The next point of protection that you need to take is simply pay attention to owning assets, not currencies. Virtually none of us should sit around and have all of our money in currency.

You should own assets. And those assets can be bought or sold in various currencies. This is, of course, what we're trained to do. By learning how to avoid inflation, excessive inflation, we wind up purchasing assets, and that's right. Assets are companies, pieces of real estate, collector watches, bonds, stock options, various things.

These are all assets. And while they may be denominated in dollars, though that can be changed in many cases, and it doesn't have to be denominated in dollars. If you own a house right now, free and clear, no mortgage, etc., you own a house. Today, you can sell your house for Bitcoin.

Today, you can sell your house for gold coins. Today, you can sell your house for Swiss francs. Now, if the US dollar is going to lose its status as the world's reserve currency, then you should find it increasingly easy for you to get a fair price for your house if it's denominated in an alternative currency.

When we see that your house and your neighbor's houses and it's a regular thing that housing transactions are being denominated in something other than dollars, that'll be a pretty good sign that the end of the US dollar is the world's reserve currency is approaching. But until then, be skeptical.

Now, this is also true on an international basis. I have been in many countries around the world where the local currency is not the normal pricing of houses. Now, this is not true in countries that have a strong currency. If you go to Great Britain, you will find that the houses are-- everything is priced in pounds.

But I've seen a lot--you see this in Latin America, you see this in places that face significant inflation. I've seen a lot in Turkey where even officially, today, the Turkish government today will give you great citizenship on investment program. If you'll buy $400,000 worth of real estate in Turkey, today you can get Turkish citizenship for you and your entire family.

You need to hold the real estate for a few years, then you can sell it, you can even make money on it. But the Turkish government denominates that not in the number of the lira, but in the US dollar. And this is--I think, again, you see this very clearly in Latin America, where you go throughout Latin America and frequently, even government processes, government issues, government fees are denominated not in the local currency, but in the US dollar.

And then conversion is sometimes made. So when you see on a global basis that change, and when you see on a global basis your own neighborhood, you see that people are buying and selling houses for Bitcoin or for gold coins or for a different international currency, then I think those are good signs that the end is nigh.

Let me very quickly--a couple of other things. We talked about have your own assets. I think having exposure to at least one international bank account, really smart, will probably for most people represent a small portion of your assets, but at least having some money in an international bank account is really smart, and this would make it a lot easier for you to get money out of the country if you ever needed to.

So this is my preferred strategy is basically have a tunnel account out. So if I ever need to get out of one country, I need to have other accounts in other countries where I can quickly move money. If you're interested on this and on other aspects of internationalization, remember I sell a course at internationalescapeplan.com, internationalescapeplan.com, as to how you can get your money, yourself, your assets out of a country and into a better situation.

And in that course, by the way, I go through this in a very careful way of showing you how you can put in place an insurance policy, and for most people that's all you need is something of an insurance policy. You don't need to take action and move to another country, probably not recommended for most people.

You just need an insurance policy in case things ever did change because while today the situation in 2023 may be fairly obvious, we don't know what the situation is going to be like in 2043. We may have guesses, but we don't know. So preparation in advance, long before you ever need it, that's the time you buy insurance policies, internationalescapeplan.com.

Here's the last set of comments that I want to focus on. There are a lot of people in the United States who are frustrated with the state of our society, and I'm one of those. And different people have their own reasons for disillusion or frustration. If you look around the political space, you won't find many people who will stand up and say things are going great.

I can't remember the last time I heard someone stand up and just unequivocally say things are going great. Even the most positive of us--I try to be pretty positive, focus on what's going well--but even the most positive of us would basically say, "Look at all these things that are going well," and yet recognize there's a whole bunch of stuff that's not going well.

I think that's true. Don't put these things together. Don't assume necessarily that they're related. Don't assume that cultural change-- don't assume that bureaucratic incompetence-- don't assume that that automatically means the death of the country's money. They're not necessarily connected. They may be related loosely, but they're not directly causal.

Financially, militarily, the United States is a powerhouse. It doesn't mean the country may not have all kinds of issues. It does. Financially and militarily, the country is a powerhouse. And those things--and at its core, for all of the things wrong with the United States, there's a lot of stuff right with it.

And that is worthy of appreciation. If you're going to find an alternative to the dollar, you've got to find a country where things are going better and where their currency is way better on all of those issues and can do all of the things that the U.S. dollar does.

And I don't see it. I don't think it exists. Hope this helps you. Be encouraged. Think as rationally as you can. Try to learn as much as you can. And then take appropriate levels of protection for your own situation. As I've said, I look at this and I want to ensure.

So I ensure against the U.S. dollar, but I don't-- I'm not out on the hardcore end of just not having any connection with it. And if you have counterarguments, I'd love to hear those. But I've spent a lot of time looking for them, and I can't find really good arguments, except from people trying to profit off of my fear and my greed.

And in line with profiting off of your fear and greed, if you want my very reasonably priced and very rational solution, again, internationalskateplan.com is where you can find my internationalization course. Bitcoinprivacy.com is where you can-- excuse me, bitcoinprivacycourse.com is where you can find my Bitcoin course. And I would encourage you to check out those resources if you haven't done so yet.

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