The Great Currency Crisis of Our Lifetimes Is Starting Now
The comments below are an edited and abridged synopsis of an article by Graham Summers
The single most important asset in the world is the US dollar. It is the reserve currency of the world, and it is involved in approximately 95% of all currency transactions globally.
Moreover, it is used in 85% of all global trade. As the New York Fed notes, the dollar is used in half of all cross-border loans/international debt securities. It also comprises 60% of global foreign exchange reserves.
Most of the debt in the world is denominated in US dollars.
When you borrow in dollars, you are effectively shorting the dollar. This is especially true if your domestic currency is not the dollar. Imagine the effect of paying back $100 million in debt if your currency is down 30% against the dollar.
Accordingly, the world is on the verge of a major currency crisis, but the dollar continues to roar higher, which is resulting in major currencies trading like microcap stocks. The British pound is imploding, dropping to a 30-year low.
This will trigger a major currency crisis soon, a crisis for which 2008 was just the warmup, the crisis in which entire countries go bust.
