We noted in this morning’s Swan Dive that the U.S. dollar is down 8% year-to-date.
For the world’s reserve currency, that’s a massive move – and a major warning signal that is drowned out by cheering stock investors right now.
Consider what happened to the last world reserve currency, the British Pound.
A century ago, the whammy of World Wars and the Great Depression meant that the U.K. had a high trade deficit and a massive amount of debt, much like the U.S. today.
So they devalued. Here’s what happened next:
The U.K.’s dominance ended with the Great War. But it still took decades for the loss of that dominance to be fully felt. There was no one single event or day where it
It’ll be the same way with the buck. Death by a thousand cuts.
-Addison
