2026 will be a year when dollars are everywhere, all over the place. Caveat, everyone is trying to get rid of it. With nowhere else to go, the dollar is being ploughed into the stock markets in Wall Street, and a balloon of a size not seen before. When a balloon is too big, overstretched, what will happen?
The Fed is printing more and more money to cover the big gap in the American economy, and the gaping holes in the US$39 trillion debt. Hundreds of billions are being printed every month and there is no end to this printing. And more Treasury bonds are being offered to the world but with no takers. Bessent needs to sell US$3 trillion by year end 2025 unable to meet his target. Another US$8 trillion are maturing in 2026 and need to be rollover. Would anyone, any country, banks or pension funds dare to take them?
The banks are also vomiting out its excessive dollar reserves into the market and converting them into gold, now above US$5,000 an ounce, or other currencies, meaning more dollars in the market. The big Treasury bond holders are also unloading and redeeming them to convert to gold. More dollars available. Even individuals are doing the same, fleeing from their dollar savings and yes, turning to gold and other currencies. The banks would be where they dump their dollars, adding more pressure on the banks to accept dollars that they have too many and did not want to add to their risk equation. When banks have too much dollars, it would be a time when they would put a limit on accepting dollars or not accepting dollars at all.
Pressure on the banks to accept dollars will only increase when dedollarisation process go full steam. The BRICS currency, alternative banking systems will all be in other currencies than in dollars. When the international trading and banking systems are not using the dollar, all the dollars will return to American banks or banks that dare to accept them and finally returning to the USA to roost. Trump is working hard to bring back all the dollars printed by the Fed to reduce the US$38 trillion debt.
Dollars will be everywhere and in abundance, especially in homeland America. The Americans will be feeling so rich. The bank vaults will be filled to the bream, with dollars oozing out from the walls. It will be a happy problem for America and for Trump and his mafia gangs. Trump would be the happiest mafia boss around and be bragging about how all the dollars he brought back to America.
As for the rest of the world, they too will be very happy trading among themselves with their own currencies, minus the dollar, free from American threats and sanctions. It will be a win win situation for America and the rest of the world.
Like the Japanese banana currency after they were defeated.😁
ReplyDeleteJapanese banana notes were small bananas, just affecting Asians. USA banana notes will be big bananas and those who hold them will be burnt to ashes. That goes for its treasury holders, getting back those big banana notes.
ReplyDeleteHahaha
DeleteJapanese banana notes used to be kept in boxes. USA banana notes need 20- footer or even 40-footer containers, lol.
When more is less. The more they print, the lesser is its value.
ReplyDeleteMany many vassals and doggies of the UAssA still held firmly to.the UAss$$ afraid to antagonise their Masters if start reducing.
ReplyDeleteThen when finally the Balloon and Bubble bursts then all be left yapping with their billions into dusts.
Maybe Taiwan is betting that the twenty billions ARES-nals sales to them may write off.