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