Is the Dollar a currency that serves as a store of value?
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In all the time we have known the economy and we believe we know how it works, the Federal Reserve and the Central Banks make us see that the Dollar is the preferred currency to protect the value of money in time. This has happened for generations, for many years and there is no doubt that the dollar is a global currency, in which each nation despite having its local currency, all are compared against the dollar.
Now, the following questions arise:
- What is true about all this?
- Do Banks really think it is a currency to protect value?
Simply put, for some time now, this position has been changing through the economy and we see the birth of other financial instruments, which in a certain way fulfill all the requirements that an asset needs to perform this function.
The Truth Behind the Dollar
In the time it has been issuing (Printing), a quantity of currencies without any economic support, that I mean with this, that the FIAT currencies, are based on what we call DEBT, due to that more and more new bills are printed increasing exponentially this DEBT, but that also generates what is called INFLATION. In this sense, this inflation is like the intrinsic value that makes the currency see.
Now, we see nations such as China devaluing its currency, also adds to this action Europe and of course the United States is doing too, the worst is that this is going to continue, however, this does not end here, the Central Banks in mid 2018 began to distrust the dollar, so, since last year and saw signs of this distrust, for this reason, ratifies what I said at the beginning of this publication, the reserve for many years has tried to sell the dollar as an asset that protects the value, but in reality is not, coupled with this the currency constantly loses value.
This was not always so, the dollar at some point in the history of the economy, became a store of value, because it was backed in gold, giving a real intrinsic value to the currency, but, this was a long time ago and now we only have to play a role, which is to trust that it has value thanks to government policies of each nation.
Is this changing now?
The answer to this question I have already answered before and it is positive. This is happening drastically, since since 2018 the Banks are buying GOLD, besides that they are issuing some bonds with negative interest rates, all this and news of these purchases that are being made by banks have been going out since 2018 and without making much noise about it, so we ratify indisputably that they begin to distrust the strength and power that has the Dollar, coupled with that you want to detach from the clear dominance that have had for many years the United States.
Many of the economies are growing strongly, but mainly there is a strong current challenger against the U.S., and we all know what it is and it is nothing more and nothing less than China. This will undoubtedly start a strong selling pressure towards the dollar, tending to seek some new model of refuge against this action, of course we see the GOLD that for many years acts as a reserve of value and clearly we see the Bitcoin also acting as an asset that protects money.
This is something that is happening, everything is very clear, these banknotes continue to be printed more and more, while in the real world, the struggle is to work and work more basically for this currency that is devalued at every step and at every moment, even if we do not notice it. Right now I personally prefer to have my money in Bitcoins, to think of its volatility I am very clear that no more than 21 million will be printed that exist, so this is the reality that hides behind the Dollar.
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