One of the biggest economic threats Americans face today is the possibility of slipping into a recession. Right now, with inflation sky high leading to a massive uptick in the cost of living and thus placing a heavy burden on folks when it comes to purchasing the basic necessities of life. Just go to the grocery store and you’ll see products you’ve bought for years suddenly three times more expensive than they were. And it doesn’t look like relief is going to be coming anytime soon, especially if President Joe Biden gets a second term in the White House.
A big concern for economists, investors, and wealth managers is the value of the dollar. As the purchasing power of the dollar continues to nose dive thanks to the Federal Reserve printing money like crazy, the less the dollar is worth. Could there come a day when it completely collapses and sends us spiraling into the dark clutches of a recession? Could that happen this year?
According to ZeroHedge, this is a real possibility:
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According to Investopedia, a currency collapses when faith in its stability or usefulness as a “store of value or medium of exchange ceases.” So how does this phenomenon happen? Well, things like wrong valuations, sustained periods of low growth in the given country, or, what’s happening right here in the U.S., massive increases in inflation.
Okay, so, allow me to break this down. Simply put, when we print too much money, our currency loses its value and the result is inflation. Inflation leads to higher prices for goods and services, which means Americans can’t afford the items they need at their current income level. Businesses feel the pinch too and often have to downsize their workforce, reduce hours, and increase prices for the public. And the cycle repeats itself.
Think about it like baseball cards. The fewer number of a specific card exists, the more rare it is, thus the higher it’s value. If there’s only one Babe Ruth card left in existence, that’s going to be worth a heck of a lot of money. If there are hundreds of thousands, it’s worthless. Same concept.
And that could be the direction we’re headed in if we don’t get someone who has a basic grasp of how the invisible hand of the market works. Clearly, Biden doesn’t really care what the heck happens to the American people. All that matters is implementing policies designed to redistribute wealth and usher in the destruction of the current system.
But if the dollar collapses and the economy experiences a deep recession, you’re going to see chaos erupt in our society. We’re already on the verge of such a scenario. Let’s hope Biden doesn’t get four more years.
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