Is the US Dollar Going to Collapse?

It’s the first week of September and rumors are circling through the news cycles, most of which are regarding the pending rate reduction, but others discuss the pending collapse of the value of US dollar.

But it the value of the US dollar really going to crash? If so, will it affect Bitcoin? We aren’t sure, but we do have some theories, so keep reading to learn more.

Is the US Dollar Headed for a Crash?

Before we dive into the details, it’s important to remember that the media in the United States is ultimately a business. They come up with titles and article content based on what they think will sell, even if they don’t have all the facts.

This is why we believe that the rumors about the US dollar collapse are just that, rumors. The media is hoping to panic people enough that they will buy subscriptions to their websites and consume more media. One of the reasons we think this is because news of the dollar “collapsing” is only reported in vague terms and on a few websites.

That being said, the US is currently in a recession, and the US Federal Reserve is expected to inject some liquidity into the economy sometime this month to encourage people to spend a little more money. This will increase inflation, and this will lower the value of the US dollar.

So, yes, we do expect the US dollar to decline in value some, but no, we do not think the proper word to use is “collapse.” The US dollar has been on a path of uncontrollable inflation since it left the gold standard, and this new announcement is nothing new. There is no need to panic, life will likely carry on as normal.

Additionally, it would take a lot more than a simple interest rate reduction to collapse such a global currency. Just look at other currencies that have collapsed, and you will see that there were political struggles beyond the out-of-control inflation for a very long period before the collapse.

We suspect that some of these articles are meant to invoke fear to try and control American votes in the coming election. So, we advise to avoid panic media with information like this and remember that during an election year things always get a little crazy in the USA.

Related: Will the United States Government Cut Interest Rates?

Will the US Dollar Value Affect Bitcoin Prices?

One of the reasons we are hesitant to trust the media reporting the pending dollar collapse is that the same articles are also reporting that Bitcoin will collapse when this happens, and these two events are mutually exclusive.

Throughout the past decade, the price of Bitcoin has often increased positively when inflation in the US also increases positively, as investors abroad look for something deflationary to invest in. This means that no news article should report that both crashes are happening this month, though they may happen this year for various reasons.

Additionally, while the US dollar can be affected by a rate change, Bitcoin is an international digital currency—so while many investors are American, these are not the only people investing in the coin. Therefore, price hikes or crashes cannot be predicted using the same tools to predict the US economy.

Remember, the US government has an overall negative stance when it comes to cryptocurrency, and they will warn citizens away from investing in any way possible. We aren’t saying there is a conspiracy theory, we are just saying doesn’t trust the news with your decision whether or not to invest in cryptocurrency.

Related: The German Government Using Bitcoin: What You Need to Know

Is There an Upside to the US Dollar Declining in Value?

All in all, as a country, you want to have a strong currency, meaning there aren’t that many upsides to having the US dollar weaken in value. That being said, however, the lowering value isn’t all bad.

One positive is that a lower dollar value can boost international trade, as it makes imports cheaper for other countries. Additionally, as the interest rate lowers, it will be easier for individuals to apply for borrowed money, like mortgage loans.

Will the US Dollar Bounce Back?

The US dollar has always been a strong currency despite several periods of decline. It almost always bounces back, and we expect that this time will be no different.

Don’t get too excited, though. It could take a long time for the US dollar to bounce back, maybe even up to a year. You’ll want to be prepared, but don’t panic, as economists predict the dollar’s value will bounce back in 2025. Thus, it could be months before the value of the dollar is strong again.

What Should You Buy if the Dollar Is Collapsing?

Again, we think it is highly unlikely that the US dollar will suffer a complete collapse, but if you are in a country where the currency is truly collapsing (like Venezuela), then you’ll want to invest in things like precious metals or oil and invest outside of the country whenever possible.

What Are Some Strong Currencies?

Surprisingly, the US dollar is one of the strongest currencies in the world, as it is currently in the top (though that may change in coming years). Don’t get too happy though, as it is in position 10 of the 10 strongest currencies.

Currencies that rank above the US dollar include the Kuwaiti Dollar, British Pound, Euro, and the Swiss Franc. There are also a few smaller currencies, such as the Jordanian Dinar and the Cayman Islands Dollar, which also end up in the top 10.

Overall, no matter what panic headline brought you to this article, it’s important to know that the media in the United States is just trying to incite panic. While the value of the dollar may decrease as the year comes to a close, it isn’t going to collapse, and there is no need to panic. Of course, if you want to invest in gold or silver, that is your choice, but we don’t advise making any massive financial changes just yet.

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