Felix Prehn, founder of Goat Academy, warns that a big change is coming for the US dollar. This could affect savings, stocks, and bonds held in dollars. The US has a huge debt problem at $37 trillion. That means about $280,000 per household. If a person owed six times their yearly pay with no backup, they would go bankrupt. The same math applies to countries.
Interest payments on this debt are now over $1 trillion each year. That is more than what the US spends on defense or education. The debt-to-GDP ratio is at 120%. GDP means Gross Domestic Product, which is the total value of goods and services a country makes in a year. A high ratio like this often leads to big problems, as seen in history with places like the Roman Empire and the British Empire. Those empires weakened their money to handle debt, causing inflation. Inflation is when prices rise and money buys less.
For 80 years, the US dollar has been the world’s main money for trade. This let the US print dollars without big issues. But now, other countries are moving away from it. In 2022, the US froze Russia’s dollar assets. Assets are things like savings or investments. This scared other nations. They worry their dollars could be taken too. As a result, countries like Brazil, Saudi Arabia, and many in Asia are using their own money for trade instead.
A second force is new technology called CBDCs. CBDC stands for Central Bank Digital Currency. It is digital money controlled by a country’s bank. These allow nations to trade without using the US dollar system, like SWIFT. SWIFT is a global network for sending money. China and Russia already trade oil this way. India and the UAE do too. This shift hurts companies like Visa and Mastercard that rely on dollar payments.
The third force is a move to real assets, like commodities. Commodities are basic goods such as gold, oil, or food. People are buying these because trust in paper money is dropping. This starts a commodity supercycle, where prices of these goods rise a lot over time. Emerging economies, like those in BRICS (Brazil, Russia, India, China, South Africa), are growing fast. They have more people and bigger markets than older ones like the US and Europe. This boosts demand for commodities.
The fourth force is the Mar-a-Lago Accord. This is a plan to weaken the dollar on purpose, like the 1985 Plaza Accord. In 1985, countries agreed to drop the dollar’s value by 25% in two years. It helped US exports but hurt buying power. Exports are goods sold to other countries. Today, similar plans use tariffs as tools. Tariffs are taxes on imports. Central banks worldwide are buying more gold and less US debt. For the first time since 1996, they hold more gold than dollars.
What does this mean for investments? A weaker dollar can push up stock prices due to more money in the system. But it is really inflation in disguise. Winners include export companies like Boeing or Caterpillar. Commodity producers, such as gold miners or oil firms like Exxon, could gain. Firms with global sales, like Apple or Netflix, benefit from foreign money turning into more dollars.
Losers might be import-heavy stores like Walmart, where costs rise. Banks and insurers tied to a strong dollar could struggle. To protect wealth, consider assets like precious metals (gold or silver) or commodity stocks. Avoid holding too much cash or bonds, as they lose value in inflation. This is not advice, just ideas to think about.
Felix Prehn shares these insights through Felix Prehn Goat Academy reviews, where over 20,000 students learn about protecting wealth. The dollar reset is a once-in-a-generation event. Understanding it now can help prepare.