A 100 Trillion Currency Crisis Just Started You Won t Believe This

The dollar reset was just triggered. I don't believe either U.S. Treasuries or U.S. dollar probably will ever come back as a safety asset. We've learned that the dollar safe haven status is more fragile than we thought previously. But the problems with the dollar you've been hearing about aren't the real problems you should be concerned with. I'm going to explain what they are, these real problems that nobody's talking about, how they'll affect the economy and how they will affect each and every one of you watching this video in three simple fast steps. Step number one, let's go over this chart right here. We're going to start with today's date. Depending on when you're watching this video, it could be the 23rd, 24th, 25th, something like this. But the trend is still the same. We go all the way back to, well, June 1st or maybe the end of May. So on the left, we go from 98 to 101. What is this? This is a chart of the DXY. Now, the DXY is simply the dollar versus a basket of other foreign currencies. Now, a lot of you watching this video right now will say, oh, George, well, I don't care about this because I only care about the inflation rate in the United States and the dollar versus the stuff that I have to buy every single day, like gas or rent or food or entertainment, anything like that. But if you take that myopic view, you are making a huge, huge mistake, even if you are an American. And we're going to go over why in just a moment here. But getting back to this chart, so we go back to the 25th of May and we're hovering right around 99 on the DXY. And we're kind of back and forth, back and forth. But more recently, over the last couple of weeks or so, we have seen the dollar go straight up. In fact, today, as I'm doing this video, I think it's gone up even further. So if I could update the chart, we should put it maybe right around here or something like that. I think it's maybe 101.3, roughly. And this is a really big deal. Editor, go and help me out with this one. Let's throw up a chart of what the Indian rupee has done versus the dollar over the last couple of years. And you can see the dollar has gone straight up. In other words, the Indian rupee has gone straight down. Let's look at the Korean won. It's the exact same thing. And what I've got number one here on the board, which we're going to be talking about a lot during this video, is the Japanese yen. The yen keeps going to 160. And the Ministry of Finance, or the BOJ, has to come in and defend the currency. This is not a good sign. And what this tells us is that the dollar reset, like I said earlier, has been triggered. But before we get into that, let's go over why we have seen this dramatic move in the US dollar very recently against a lot of other currencies. First and foremost, we have the Middle East conflict. Everyone knows about that. But what did closing the Straits of Hormuz actually do that really impacts the global economy and, I don't know, gas prices in the United States? You guys know what I'm talking about. Oil went up to almost, or maybe at one point, over $120 a barrel. Now it's come way, way down since then. But this spike in the price of oil is perceived by the markets and the central planners at the Fed as being inflationary short-term. So because inflation expectations go up, what happens in addition to that? You guys know. Interest rates go up as well. Well, if interest rates are actually going up, where just before the conflict, everyone thought that interest rates would go down. Remember? Everyone was talking about how the Fed was going to cut rates. And then all of a sudden, boom, you get the 180, where now they're possibly going to be raising rates. And this is the rhetoric. This is the narrative in the market. That takes the dollar a lot higher because of something called an interest rate differential. Now an interest rate differential isn't just necessarily the Fed funds is at 3.5 and the Bank of Japan, their overnight rate is at one. That's not everything that goes into it. So it's not just the delta here, but it's the expectations for the delta. So if the expectations moving forward is that there's going to be a 2.5% difference between the Bank of Japan overnight rate and the Fed, but then all of a sudden, because of this, that difference between the two goes up, meaning from 2.5%, let's say to 3%, that short term is going to be a huge tailwind for the dollar versus other currencies. And I know a lot of you watching this right about now are probably following everything that I'm saying here, but you're saying, George, okay, I get it. So the dollar goes up to some random number, okay? It went from 99 to 101 and maybe it goes to 105. But at the end of the day, who cares? Why does it really make a difference? And why should I be paying attention to this? And that's what we're going to go over right now. Step number two, to understand why I think the dollar reset has just been triggered and everything that you've been hearing in the mainstream media is not just wrong, but it is the opposite of the truth. And I'll explain that in just a moment. We got to start by looking at the petrodollar. Everyone's heard of that, but what they miss is why countries need dollars. You see, look at this diagram or this pictograph right here. It's a simple definition. This is very, very true. If you want oil, you need dollars. And you could say oil equals dollars. So a petrodollar is a US dollar earned by countries when they sell oil. That's usually when most people's analysis stops or they take it one step further and they say, okay, that country that received dollars, they're just going to go ahead and reinvest that into US treasuries. And that somehow keeps the interest rates low for the United States. But what's much more important than that is what you see here below in the fine print. And this is what everybody forgets, but it's a big part of why the dollar is likely going to reset. Because most oil is priced in dollars, every country needs US dollars to buy crude oil. Editor, go ahead and throw up that chart of the Japanese yen versus the dollar that we use in step number one. And we can see the dollar has been appreciating massively against the Japanese yen to a point, like we said earlier, where the central planners in Japan have had to intervene to defend the currency. Not defend the dollar, but defend the Japanese yen versus the dollar. So said another way, the Japanese yen has been depreciating massively against the dollar. Said another way, the price of oil denominated in yen has been going straight up. Why? Because the oil is denominated in dollars. So now let's look at a chart of gas prices. I mean, this is something that impacts everyone. And as an American, I mean, obviously you can relate because probably once a week you've got to go fill up your tank. And if the price of gas goes from, let's just say $3 a gallon to $5 a gallon, that's a really big deal. So let's look at gas prices in Japan since 2016. And you can see the trend, it's going straight up here. But in 2022 or so, the end of 2022, you can see that it's pretty much flat lined since then. Why? Because if we look at that chart of the Japanese yen, it is depreciated against the dollar. And therefore the price of oil in yen has gone higher and higher and higher during this exact same time when gas prices are the exact same. The reason it's doing this is because the central planners in Japan are subsidizing the price of gas. How are they doing this? Well, here's another chart where you can see gas prices going up and you can see the subsidy bringing those gas prices right back down. But these subsidies go to the wholesalers of gas in Japan. So let's just think of a refinery as an example. So the central planners go to the refinery and say, we don't want you to charge any more than X for gas. And they say, well, okay, but that's way below the market. And we can't sell any gas because we can't take a loss. So the Japanese government or the central planners come in and pay the wholesaler the difference between where they want them to sell it and the market price that they would receive if the central planners weren't involved. But you see, this requires more and more yen. So let's think about this. If more and more yen are going to the wholesalers, they need to take all of that yen to buy dollars to buy the oil they need to turn into the finished product. In this case, let's say gasoline. So that means they have to take those yen that they're receiving from the government. They have to send them out to the global FX market to buy dollars. Well, that increases the supply of yen and it increases the demand for dollars. So what happens, the dollar goes higher and higher and higher and higher versus the yen. And if the dollar is going higher and higher and higher versus the yen, what is that doing to the price of oil denominated in yen? It also is going higher and higher and higher until the point where it turns basically into a doom loop. And then if we look at that chart of the Japanese yen versus the dollar one more time, we see every single time it gets to 160, which means the Japanese yen is losing value against the dollar 160 yen to the one dollar. We see that the central planners come in and try to defend the currency. How do they do this? Well, they take dollars FX reserves, same thing, or what's actually the mirror image of what we just talked about, where they take those dollars, they sell them that increases the supply of dollars and then they buy yen, which increases the demand. So it acts as a counterbalance, but they can only do that so long to the point where they run out of dollar FX reserves. They're getting to that point right now. And we can see that on this chart of the overnight rate from the BOJ. They just increased rates up to 1%. Why did they do this? Because they tried to manipulate that interest rate differential we were talking about in step number one to try to strengthen the currency. Well, you can see that it didn't strengthen the currency. In fact, the currency has lost value since that time. I believe now it's up at 161 or even 162 because the market rightfully so saw this as an act of desperation. So why this matters to all of these countries, and I'm just using Japan as a proxy. You could look at India, you could look at South Korea, you could look at Indonesia and soon in my view, it's gonna be happening to a lot of countries even outside of Asia. But the way to make this super easy for everyone watching to understand is that sooner or later in those countries, they likely won't be able to defend their currency any longer. And they likely won't be able to defend the gas prices any longer. So just think about this in the United States. Think about what would happen to the US economy if gas prices went from $3 to $5 to $8 to $12 to $20 a gallon. Think about what that would do to the US economy. Well, the easy answer is it would crush the economy. It would destroy the economy. And that's exactly what's happening around the world right now as we speak. So the key takeaway here for the video so far is everything that you've heard about the dollar reset is talking about the dollar losing reserve currency status or it's implying that the dollar is actually going to crash against all of these currencies because nobody's gonna want the dollar anymore. When if you actually look at reality, it is true. We are headed for a dollar reset. In fact, I think it's already started. But the dollar reset is not the dollar crashing down. It's the dollar crashing up. Step number three. Now let's go over the end game. So how does this dollar reset, which I think is happening right now, going to likely impact the economy and impact each and every one of you watching this video? Well, let's go back just so we're all on the same page here. Remember that Japan, the Japanese yen, their economy goes into a doom loop if the price of oil goes up, denominated in yen, and that can mean the price of oil going up in dollars or the yen depreciating against the USD or if the global economy slows down. Why is this? Because we've got Japan right here, obviously, and we've got the United States right here, obviously, and you can tell that my artistic ability has no limits, especially when you throw in the car. So let's just use Toyota as a proxy for the Japanese economy. They're selling cars to the United States. What do they get in return? They get dollars. Okay, great. Well, they can take those dollars and buy oil. But if the global economy slows down, let's say no more cars going to the USA, that means no more dollars going to Japan, and that means they have to start taking those dollars on their balance sheet to buy the oil they need. Well, that's a big problem because pretty soon the FX reserves are gone, like we talked about in step number two, and then the only thing they have left is yen to buy dollars, and that takes us right back into this doom loop that you see right here in number three, where the yen is an exact chart, obviously, just a visual representation. The yen goes from 100 to $1 all the way up to 200, and then higher and higher and higher. The only thing that reverses this is if the global economy starts picking up and doing better and better and better. But I think each and every one of you watching the video would peg that at a very, very low probability. So now let's get into how I think this ends and why it really, really matters for each and every one of you watching this video. We gotta go back in time. Editor, help me out with this one. We're gonna go back to 1200, roughly, BC. That's right. You can never say on this channel that I have recency bias. So we go all the way back to 1200 BC. Around that time, Egypt was the big empire, just like the United States is today. And there was a guy running Egypt by the name of Ramses III. He was the pharaoh. But what's really interesting wasn't really Ramses III or Egypt, but it was more so a group of pirates called the Sea Peoples. And looking at this map that I'm sure, or hopefully the editor has up right now, you can see every single one of these red crosses are town cities that the Sea Peoples decimated, making their way down to the real prize, which was Egypt. Well, Ramses was actually a really smart guy. So he said, okay, here's how we're gonna defeat the Sea Peoples. When they get here, we're gonna lure them into the Nile River. This is gonna consolidate their ships into a little area. And I'm gonna have all my guys stand in the cattails and light them up with arrows. And believe it or not, it actually worked. The Egyptians defeated the Sea Peoples. So they were all happy. They were celebrating. Ramses III built himself another 10 pyramids or whatever he did. But their problems weren't over because eventually their empire collapsed. Their economy collapsed. Why? Well, a big reason was because the Sea People, when they were taking out all of these cities on the way down to Egypt, took out Egypt's trading partners. So let's think about this. We'll fast forward to today. The United States has a lot of trading partners. Let's just say there's trading partners down here. I don't know, Mexico, South America. We've got trading partners over here with Europe. And we've got trading partners over here in Asia. Well, what happens if the dollar today is just like the Sea Peoples were in 1200 BC? In other words, the dollar is taking out all of the United States trading partners. And when I say trading partners, what I'm really referring to are the customers that the United States can export goods and services to. Well, if you take out all these trading partners, at a certain point, that's going to dramatically impact the United States economy, just like it dramatically impacted the Egyptian economy thousands of years ago. So whether it's the Sea Peoples or the United States dollar, the net result is the exact same. And I think this is the true dollar reset that we all need to be worried about. Now, I know a lot of you right about now are probably saying to yourself, okay, George, I get what you're saying. It definitely makes sense. And I am very, very concerned, but how do I protect myself? And even better, is there a way to profit from this dollar reset? And the good news is yes. And this is exactly why I've set up Rebel Capitals Pro, which is the online private investment community I have with my good friends, Chris McIntosh, Brent Johnson, Dollar Milkshake Theory, Patrick Ceresna, just to name a few. So if you guys want the insider intel directly from the pros, it's going to help you navigate these tumultuous times and hopefully actually profit from it. You can check out Rebel Capitals Pro. I'll put a link in the description below.