What Most People Don t Know About Holding Cash In 2026

We understand how the government spending is inflationary and the reason why this is so important for you to understand and the reason why this is so critical here is because, yes, it's inflationary. But remember, the reason why it's not more inflationary is because the United States dollar is the world's reserve currency. Everybody continues to have faith in the dollar. Why? Because the world does trade in the dollar. The world buys oil in the dollar. The world does business in the United States dollar. So there's still a lot of demand in the dollar. So the dollar relies on demand in order to continue having value. But if the world has less demand of the dollar, well now all of a sudden the dollar doesn't have as much buying power, which means that your paycheck that you're working for can't buy you as much stuff. Your savings can't buy you as much stuff. And you know that over the last number of years, especially post-pandemic, savings have been losing value. Your paycheck might not have been growing fast enough to keep up with inflation. All of that is due to this inflation right here because of the government spending. But the real inflation has been contained because people continue to have faith in the dollar. Imagine what would happen if people said, hmm, I don't have so much faith in the United States dollar anymore. I don't want the United States dollar. Well, now that can create a bigger problem because it costs 12 cents to print a $100 bill. You can start to see that problem there. And this is what the president of China is alluding to. Over the last number of years, we've been slowly starting to see people and countries start to move away from the United States dollar. I'll show you some numbers. Back in the year 2000, 71% of global reserves were saved in the United States dollar. Fast forward 10 years and in 2010, only 62% of global reserves were saved in the United States dollar. Fast forward to 2020, now only 59% of global reserves are saved in the United States dollar. Fast forward halfway through 2025, and about 56% of global reserves are saved in the United States dollar. You can start to see a trend here that over the last number of years, less global reserves are being saved in the United States dollar and they're starting to be saved in other currencies and other forms of money. Why does that matter? Remember what I was talking about before, supply and demand. Less demand for the United States dollar, less value for the United States dollar. And this is where China comes into play because China understands that this is happening and they're actively doing things to accelerate people leaving the United States dollar because China wants to strengthen their currency. They want to strengthen their economy. They want to be the next world's economic superpower. And so China has worked to build together their own pact called BRICS. Brazil, Russia, India, China, and South Africa, along with many other countries now, have started to create their own alliance where they are working to transact in their own currencies and they're working to try to leave the United States dollar. We saw Indian refiners buying Russian crude oil in the Chinese Yuan, not dollars. We're seeing BRICS countries working to build their own payment system outside of what the United States has created. And now we have this conflict in the Middle East and everybody's talking about Iran, but it also impacts China. I'll talk more about that in just a minute. Keeping up with the economy is not an easy thing to do. And then when you have all these crazy things happening, it makes it so much more difficult not to get caught up in the political mess. And that's why I created Market Briefs. It is a free newsletter for investors that breaks down what's happening in the economy without all the politics and without all the fluff. It's a quick five-minute read. We break down what's happening in things like the economy, housing market, stock market, crypto market, and global economy into a fun, witty, and easy to read newsletter. It's read by hundreds of thousands of investors every single morning. And as an added bonus, when you sign up for Market Briefs, which is free, you're also going to get my investing masterclass where I walk you through, hike, get started as an investor, and find hidden investment opportunities before they hit the headlines. I'll show you the exact framework that my firm uses to research investment opportunities. So if you want to get the investing masterclass and Market Briefs all for free, all you have to do is sign up, and I have the link for you down in the description below. Now, here's the reality. The United States dollar is not going to zero tomorrow. We're not going to lose the reserve status tomorrow. It's a slow and gradual shift, and we've seen this shift happen time and time again across centuries and across empires. We saw it happen from the great Roman Empire. We saw it happen to the Spanish Empire. We saw it happen to the British Empire. And now the American Empire is entering a point of what's going to happen next. The American Empire is led by the United States dollar, and every great empire before us lost its status because government started to then spend money they didn't have, which then led to the devaluation of currency. And the devaluation of currency hurts the economy, hurts that currency, which eventually creates the opportunity for a new world order, a new world superpower, a new world currency. And that's what China is alluding to, that they want to be next. Now, when will that happen? Will it happen in our lifetime? I don't know, but that's the thing that you want to pay attention to. And the reason why I was talking about what's happening in the Middle East is, let's take a step back and understand how China plays a part with the Middle East. Because Iran is a big producer of oil. And the largest buyer of Iranian oil is not Europe, it's not India, it's China, because China is purchasing something like 90% of the oil from Iran. So we talk about this conflict in the Middle East as if it's a war between the United States and the Middle East. But now when you have talks about the United States blockading the Strait of Hormuz in the Middle East, well, why would the United States want to blockade oil passage through the Middle East? Because if we are stopping oil from passing, that's hurting the supply of oil. If you don't have supply of oil, the price of oil goes up, the price of gas goes up, the price of inflation goes up. Why would the United States do something to make inflation worse? Because they know that if they can stop Iran from shipping their oil out, that's less oil going to China. Why did the United States get involved with Venezuela? Well, a big buyer of their Venezuelan oil was also China. Not to mention that not only is Iran selling oil to China, Iran is selling oil to China below market value. Why does that matter? Because that means China is able to buy this oil at a discounted price, and oil is used to produce plastics, oil is used to make energy, oil is used for every part of the economy. And if China is getting this oil for cheap, then they can use this cheap energy to produce more products to compete against the United States. Now we also know that the Chinese economy has been growing by around 4% a year, while the United States economy has been growing by only around 2% a year. This is why many economists are saying that over the next decade or so, if the United States and China grow at the same speeds that they're going now, China's economy will surpass the United States economy. So maybe these conflicts geopolitically aren't just what we think it is, maybe it's a way to try to hurt the Chinese economy. We can go back to the tariffs that are happening. Well, why do the United States impose such strong tariffs on China? We talk about wanting to bring manufacturing back to the United States, and I'm sure that's part of it. But don't forget, the United States companies do a lot of business in China. And if these companies are now tariffed out from doing business in China because it's so expensive to do so due to the tariff taxes, if these companies move their businesses out of China, that's going to hurt the Chinese economy because that means businesses and money is moving out of China. So we can start to see this economic game being played here, where the United States was ahead, they are still ahead, but they're concerned that China is going to take the lead. And now we can do two things, we can try to compete and beat China, or we can also try to hurt China in their own game. How do we do that? Potentially by tariffs to entice businesses to want to leave China, potentially through these oil conflicts to make it more difficult and more expensive for China to get energy. And that's why you want to understand some of these things that are going on, because not only is it an economic thing, but it's also for the value of the United States dollar, because if you're working for dollars and you're saving dollars, the last thing you want is to have concerns about the dollar losing value. And anytime the government spends money, the dollar loses value. Now you might say, well, why can't the government just stop spending money? Because there's a pretty simple solution to the problem, but that spending comes with a pain and consequence as well, because now we've reached a point where people are addicted to government spending. We saw what happened with Doge in early 2025 when they started cutting government spending. Now, Doge did not do what it was saying it was going to do, but the idea was Doge was going to reduce government spending. Well, anytime you hear of the United States government cutting departments, cutting spending, well, that means somebody is not getting paid. That means somebody is getting laid off. And those things cause pain, because remember, the United States government is the largest spender in our economy, which means a lot of salaries are reliant on the United States government spending. If you enjoyed this clip and you want to continue your financial education journey, I have another video that I think you'll love. All you gotta do is click that button right over there. And for those of you who want to stay up to date on the top finance and business news, you can join Market Briefs, my free financial newsletter, by clicking that button below. Thank you for watching, and I'll see you in the next one.