this post was submitted on 30 Dec 2025
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[–] Aceticon@lemmy.dbzer0.com 24 points 6 days ago* (last edited 6 days ago) (4 children)

Have we already reached a tipping point for the USD as a reserve currency?

If not will this make that happen?

Because the real "shit hits the fan" moment will be when the rest of the World dumping USD assets (most notably, Treasuries) starts snowballing as those still holding assets valued in USD start getting hit by dollar devaluation due to others having dump USD assets, pushing them to sell dollars and dollar-denominated assets to avoid further losses.

Given just how large of a fraction of their currency is held by foreigners, a snowballing aversion to holding dollars is the kind of thing that can result in hyperinflation in the US.

[–] regedit@lemmy.zip 7 points 6 days ago (3 children)

Somehow, even while blaming tRump for their plight, Republican voters will continue to support tRump, even as they lose everything they and their family have. It's so fucked up!

[–] Diplomjodler3@lemmy.world 8 points 6 days ago

He let them use the n-word again without getting embarrassed. That's what they love him for.

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[–] icelimit@lemmy.ml 3 points 5 days ago (5 children)

How do I make money from this?

[–] plyth@feddit.org 7 points 5 days ago

Don't. Remember the classic

markets can stay irrational longer than you can remain solvent

[–] Aceticon@lemmy.dbzer0.com 5 points 5 days ago* (last edited 5 days ago) (1 children)

That's a surprisingly more complex question that it seems.

Which money? Dollars, Euros, Yen, something else?

Unless you're a professional investor, it really depends on which currency you spend for your day to day or big ticket items.

So first I'll answer a slightly different but related question: "How do I protect myself from this if I'm American?"

  • Move your savings/investments to assets which are not denominated in USD (for example, stocks in a non-US stock exchange), open a bank account which is not in USD (I believe that's possible in some banks in the US) and convert your savings to that currency and deposit them there, buy Gold (thus in practice converting you savings to a ancient currency not controlled by any state). That is, if you have savings. If you don't, well, you'll mostly have to weather it: concrete non-perishable stuff has the same utility value no matter what the dollar value is, so your home is your home (if you're lucky enough to own it) thus its worth to you is the same whatever it's supposed dollar value is, and as others said "canned goods and cigarettes" too keep their value no matter what the USD value says.

As for how to make money from it, as somebody else said, "forex gambling", more specifically derivatives on cross-currency pairs such as Futures on USDEUR. However that stuff is risk: Will USD hyperinflation really happen or will it be something milder? When will it happen, precisely? Derivatives move like crazy and things like Futures can result in margin calls (basically you have to give them more money) if they move against the direction you're betting,

Back when I lived in Britain I avoided the 20% crash of the British Pound from the Leave Referendum results by having most of my savings in Gold and Euros, so in pounds it could be said I made a 20% profit in a couple of days (basically the week when the results came out), though now I'm in the Eurozone and, not even being a Briton have no relation to that country and don't actually care about about the value of my savings in British Pounds, so that week I didn't really made any profit in Euros. That said, over the years (the money is still there) that investment in Gold has gone up in value quite a lot even in Euros.

That said most of it was the product of me simply distrusting Britain and the British Pound as a safe store of value hence already keeping a big chunk of my savings outside it, though I did move some more just before the Leave Referendum results came out just in case.

So in summary: just getting your savings out of the USD merely to another currency will protect them, whilst Gold over the long term will probably make you a bit of profit (certainly in USD due the mismanagement of the US Economy). Big profits can only come from forex gambling, but so do big losses as derivatives are much more risky that just holding the underlying assets (in this case, some foreign currency you bought with dollars).

[–] icelimit@lemmy.ml 2 points 5 days ago* (last edited 5 days ago) (1 children)

Nice write-up, but I'm not American, never been there, have no wealth in USD. How do I make money then? Derivative-shorting the USD somehow? But as others have mentioned, the descent is unpredictable.

[–] Aceticon@lemmy.dbzer0.com 2 points 5 days ago* (last edited 5 days ago) (1 children)

In that situation I can only think of derivative shorting of the US as a way to directly make money from it.

Indirectly, maybe bet in gold to reap gains from the global environment of uncertainty in the safety of modern currencies that will surely come with a USD crash (that's basically how I've positioned myself since a few years after the 2008 Crash - having concluded that the whole "saving of the Economy" after it wasn't fixing any of the problems, just delaying the consequences - and that has yielded in EUR a return of about 400% in a bit over a decade, especially in the last 5 years).

One might also bet in currencies most likely to gain from the end of the US and USD dominance, the greatest of which IMHO is the Chinese Yuan, but how you would go about doing it, I don't know.

[–] icelimit@lemmy.ml 2 points 5 days ago (1 children)

Maybe I can just buy the dip later? Or will the USD go the way of the mark?

[–] Aceticon@lemmy.dbzer0.com 2 points 5 days ago* (last edited 5 days ago)

When the USD stops being the world's reserve currency, it will never recover its previous value because it will never again have such a status and the worldwide demand for a currency that comes it it, so in broad terms it won't be a "dip".

Sure, it will overshot its final value (big market movements always do) so there will be a local dip at the bottom, but even if one can actually time it right (good luck with that) whether one can profit from it or not also depends on whether it actually caused hyperinflation and how the authorities deal with it - those things tend to be confusing and involve things like emission of a new currency or other non-orthodox measures as seen in Germany's, Zimbabwe's and several Latin American country's historical situations of hyperinflation.

More in general and if you look at other markets, a run on an asset (say, a stock whose price is crashing) usually breaks the market for it (for example, in the 2008 Crash Bear Stern's stock value collapsed and the whole company ended up being bought by another bank for $1), so I wouldn't bet on the usual market rules applying to a USD during a period of hyperinflation.

I suppose if you're just using something that mirrors the asset rather than being the asset, such as a derivative, you might be able to take advantage of the local dip at the bottom.

[–] vga@sopuli.xyz 2 points 5 days ago* (last edited 5 days ago)

Probably by hoarding some USD. Financial advice on Lemmy works pretty great if you do the exact opposite of what the highest upvoted people are suggesting.

This place is the opposite of accurate information when it comes to global finance.

[–] SabinStargem@lemmy.today 2 points 5 days ago (1 children)

Put most of your US dollars into non-US currencies or valuables, such as cigarettes, canned food, or gold.

Back in the Weimer Republic, outsiders from France and other countries would regularly cross the German border to buy food, carouse, or to buy up things like grand pianos for their version of $100. America's middle class may have most of their belongings ending up in Canada and Mexico.

[–] plyth@feddit.org 2 points 5 days ago

How do you know that gold is not already overvalued?

If you buy gold remember that nobody has to honor certificates in a crisis but that gold at home is also not secure, especially if you start paying with it.

[–] __ghost__@lemmy.ml 2 points 5 days ago

Forex gambling

[–] voodooattack@lemmy.world 4 points 6 days ago (1 children)

I’ve personally been using it like that for my entire freelancing career of over 20 years. Not since last year though. I’m not staying on a sinking ship.

[–] Aceticon@lemmy.dbzer0.com 3 points 5 days ago* (last edited 5 days ago)

Back when I lived in Britain working as a freelance ITer in the Finance Industry, after the 2008 Crash and from pretty much a front seat seeing how the authorities there managed the whole thing I lost trust in Britain and the British Pound to safely hold my savings, so kept moving any money I saved out if it, first to Euros (as I was an immigrant there and still had a bank account abroad) and later also to Gold.

Fast forward a few years and when the Leave Referendum results came out and the British Pound tanked 20% in a week, I had only about £2000 in British pounds, having even moved most of the leftovers of my savings out of the pound before the results came out "just in case".

So my own anecdotal experience is that when a country's economic and social stability starts showing cracks whilst the politicians in power are mainly concerned with their own wealth and that of their mates, it's best to at least move a fraction of one's savings out of that country's currency, possibly even out of the country itself (I did both, though my situation was unusual in that as an immigrant in Britain I naturally had a bank account outside Britain).

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[–] Randomgal@lemmy.ca 33 points 6 days ago (1 children)

This is already being written down in the history books because of how devastating it is at home and abroad. You can look up Trump-Futanari inflation if you don't believe me.

[–] Diplomjodler3@lemmy.world 6 points 6 days ago (1 children)

Hmm. Guess I shouldn't have invested my kids' college fund in futanari bonds after all.

[–] Holytimes@sh.itjust.works 4 points 5 days ago

Everyone knows futanari bonds are a bad idea! You gotta flip your futanaris frequently!

[–] petrjanda@gonzo.markets 8 points 5 days ago (1 children)

The Greenback has really outlived it's purpose as world reserve currency because the government and central bank can't be trusted with fiscal discipline. It may improve post Trump

[–] n0respect@lemmy.world 2 points 5 days ago (1 children)

I fear the dollar will drop so precipitously Trump will be "forced" to make TrumpCoin our official currency [forced on purpose], like a shitty version of EU's proposed digital currency

[–] petrjanda@gonzo.markets 3 points 5 days ago (2 children)

That would be truely outrageous. Luckily he can't do that.

[–] n0respect@lemmy.world 5 points 5 days ago

I understand, but at this point I don't trust that line of reasoning. If he want to do it, he will.

[–] HK65@sopuli.xyz 2 points 5 days ago (1 children)
[–] Sunflier@lemmy.world 2 points 5 days ago (1 children)

The Executive can't take over the monetary decisions of the country, even if the monetary decision is to replace the currency with one the executive just happens to control and put out as private party. Congress is the one with the power to tax, spend, and create money per Article 1.

[–] HK65@sopuli.xyz 7 points 5 days ago

Yeah, but who enforces the constitution right now in the US? The executive can't start wars either.

What would practically happen if Trump and the White House just declared they did it, and the oligarchs just went and had the tech made to enforce it?

[–] Etterra@discuss.online 8 points 5 days ago

Ah yes, the "Biden economy" at work. 🙄

[–] Blackmist@feddit.uk 12 points 6 days ago (1 children)

Why would Sleepy Joe Biden do this? 🤷

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[–] protein@programming.dev 3 points 5 days ago* (last edited 5 days ago)

The rupee drops more for some reason

[–] CircaV@lemmy.ca 5 points 6 days ago

The US is a literal house of cards. Would love for the world to finally move away from the US dollar as reserve currency.

[–] NigelFrobisher@aussie.zone 5 points 6 days ago (2 children)

Cool, does this mean the Steambox will become cheaper, or is it made in China anyway?

[–] LastYearsIrritant@sopuli.xyz 4 points 6 days ago

It would have to be 100% made in USA for it to be cheaper from a weaker dollar, so no.

[–] Telodzrum@lemmy.world 2 points 5 days ago

lol no

With RAM prices being what they are, that thing is going to cost $2000.

[–] FosterMolasses@leminal.space 3 points 6 days ago (1 children)

FAFOOOOOOO 🎊

Have the day you voted (or abstained from voting) for!

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