An Inconvenient Truth Part TWO. (Reserve Currency Downfall). Three Phases.

From Greg M

Lions…

Before you read this, read part one first. Click HERE.

Lions… there IS an historical pattern, a specific set of dynamics, that has led to the fall of every world reserve currency. And those dynamics are playing out again right now.

Historically, the world reserve currency changes hands about every 80–110 years. (Look this up).

Here’s how the cycle works, using past empires as the template.

There are essentially THREE phases.

Lions… ALL THIS is learned in basic economics and finance. Anyone who has studied economics and finance is, or should, be aware.

1. Rise through Strength and Production. The reserve currency originates from a productive, innovative, and militarily strong nation. Trade dominance, strong navy/military, and credible/strong currency are the keys.

2. Global Trust and Reserve Adoption. Other countries begin holding the currency for trade and security. Financial centers grow (London, New York, ETC). Currency becomes the default medium for global commodities (gold, oil, etc.).

3. “Financialization” Begins. The term “financialization,” in economics and finance, is defined as follows. When a nation shifts from producing goods to exporting debt and financial services. What then follows is invariably the same. Debt balloons and the purchasing power of the currency DROPS. Then, domestic industry weakens, inflation takes over. Other nations start creating trade blocs, alliances, and alternative systems. Trust in the reserve currency declines, slowly at first, then rapidly. The world begins to diversify away.

Lions… WE ARE IN THE THIRD AND FINAL PHASE.

GM