The Gold IRA Company

Follow The Dollar

Article in Seeking Alpha

By: WWS Swiss Financial Consulting SA

Summary

• The US dollar is still the most important global currency.
• US Government spending is out of control and threatens the health of the dollar.
• The US has a huge trade deficit.
• Investors should prepare in advance for dollar weakness.

The US dollar is still the most important currency globally. The petrodollar system is still functioning, and around 85% of Forex trades involve dollars.

Forex Market Size: A Trader’s Advantage

The percentage of central bank reserves in $US is 61%. There are, however, developments that could result in the US dollar losing its dominant position. It is important for investors to be aware of the current state of the US dollar so that they can take measures to protect their portfolios. Even though at the present time it may seem that the US dollar has been maintaining its predominant position in international finance and the dollar index is still high at 97.45.

U.S. Dollar Index (DXY)

It is by no means certain that this situation is going to continue for much longer as the US Government has lost control over its spending, and future deficits are already calculated to be over $1 trillion annually, and these forecasts do not even take into consideration the possibility of a recession. See the figures of the Congressional Budget Office (Congressional Budget Office).

It is widely known that US federal debt has surpassed $23 trillion. The reason why the Treasury can pay the interest on such a huge debt is that interest rates are extremely low. See the US debt clock (U.S. National Debt Clock : Real Time). The figure for interest payments for fiscal year 2019-2020 is $479 billion.

The annual federal deficit is over $1 trillion, and that is going to continue so for several coming years. The Government has shown no signs of planning to cut spending. The same situation seems to prevail regarding the trade deficit. The annual trade deficit is $556 billion.

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Although the information in this commentary has been obtained from sources believed to be reliable, The Gold IRA Company does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice. The Gold IRA Company will not be liable for any errors or omissions in this information nor for the availability of this information. All content provided on this blog is for informational purposes only and should not be used to make buy or sell decisions for any type of precious metals.