Top of Mind: The Fate of the US Dollar | Aspen Funds
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Top of Mind: The Fate of the US Dollar

Join co-hosts Bob Fraser and Ben Fraser as they delve into an insightful discussion on “The Fate of the US Dollar,” a thought-provoking episode that explores the current state and potential future of the United States’ currency. Drawing on their expertise in economics and finance, they analyze the factors influencing the US dollar’s position in the global economy and shed light on its potential implications.
 

Connect with Bob Fraser on LinkedIn https://www.linkedin.com/in/bob-fraser-22469312/
Connect with Ben Fraser on LinkedIn https://www.linkedin.com/in/benwfraser/

 

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Transcription

Ben Fraser: Hello, Future Billionaires! And welcome back to another episode of the Invest Like a Billionaire Podcast. I’m your co-host Ben Fraser. Joined by fellow co-host 

Bob Fraser: Bob Fraser. 

Ben Fraser: And today we are gonna do a top of mind episode on the fate of the US dollar. So periodically we will come on here and share our thoughts.

These top of mind episodes we’re the hot topics, what are investors talking about, what are the headlines saying? And we like to dive deeper on this podcast, as than just the headlines. And there’s been a lot of fear. We’ve actually been getting texts and emails from investors worried about the US dollar losing its status as a reserve currency and the whole bricks kind of arrangement coming out.

We actually just did this presentation by having Bob for our shareholder event just last week. We have an annual shareholder event for investors with Aspen funds. And just took a little time to run through this. We thought we’d share this information with all of our listeners here to just help you understand what’s going on and the reality of these concerns and should we even be concerned and.

What’s going on here? This is the Invest Like a Billionaire podcast, where we uncover the alternative investments and strategies that billionaires use to grow wealth. The tools and tactics you’ll learn from this podcast will make you a better investor and help you build legacy wealth. Join us as we dive into the world of alternative investments.

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Bob Fraser: investors

Ben Fraser: looking for passive investments done for you. With Aspen Funds, we help accredited investors that are looking for higher yields and diversification from the stock market. As a passive investor, we do all the work for you, making sure your money is working hard for you in alternative investments. In fact, our team invests alongside you in every deal, so our interests are aligned.

We focus on macro driven alternative investments, so your portfolio is best positioned for this economic environment. Get started and download your free economic report today. So Bob, take it away. 

Bob Fraser: Yeah. And there’s a lot of alarm about the US dollars you pointed out. We’re get continually bombarded with questions from our listeners and, fair enough. Let’s answer the questions. But this is just the latest iteration of the same question that’s been I’ve seen, maybe four or five times in the last 20 years since it’s since the eighties. Really 40 years. And the latest one is the BRICS countries. Now the dollar disappears in value. And I first wanna say if you believe your dollars are about to come valueless, please feel free to send them away. And that’s tongue in cheek. But the point is they have a lot of value. And let’s not forget that. But this was a, there was another iteration.

There’s the I M F depository receipts that they were gonna create, and China was gonna create a new currency there. That was 2015. There’s always a new, the dollar is about to die. Here’s the latest iteration, and this is from I believe this is Business Insider.

It says, de Dollarization could become a reality as a brick’s alternative to the dollar could enjoy high prospects for success. A former White House advisor said Joseph Sullivan and how. Who served as the staff economist for the White House Council of Economic Advisors during the Trump administration wrote in foreign policy that a currency issued by Brazil, Russia, India, China, and South Africa bricks would pose a unique threat to the dollar’s dominance.

There it is. But it goes on to say Sylvan also noted that would not spell the end of the dollar’s reign. Oh, okay. Which still accounts for 84.3% of cross border transactions. But possibly contribute to a multipolar regime. And several currencies are dominant, in fact, some of the dollars decline in install decline in dollar strength could be a good thing.

He writes, at the moment, the greenback’s high price cost the US Jobs and lowers export. So the headline is certainly a lot more alarming than the details of the meeting when you actually read what he’s actually saying. But let’s look at what Joseph is talking about and what the concern is.

Just a few charts as background central bank reserves. And so if you’re listening on this, you can pull up the YouTube later or look in the show notes and see the PowerPoint we’re using. But central bank reserves are, so the central banks are the banks that manage the currencies of the various nations.

And they had, they ma maintained reserves and other currencies in order to trade with those currencies and comp, maintain exchange rates and be able to supply liquidity. To commerce and other things. So right now, central bank reserves are 58% held in the US dollar. So it’s, and the number two currency is the Euro bricks, currencies are reserve.

Only 3% of global central bank reserves are three. Our our bricks, so very low global trade today. Yeah, China dominates global trade bricks. All in all though, are only 18%. All cumulative. Foreign currency trade, it’s the largest most liquid market in the world. If literally $7.5 trillion are traded every single day in foreign exchange, so that means the currencies are changed, right?

Yep. 87% of which is traded in the US dollar. So 87%, the US dollar is just by far the most dominant currency, 33% in the Euro. So you can see. So the dollar is very dominant. This chart is actually from the Federal Reserve and it shows an index of currency use as a combination of corn currency, reserve trade, and foreign exchanging.

Can see over time the dollar’s dominance is. Dropped from, let’s say, 72% ish, around there to 60 whatever percent, 65%, 65% ish, somewhere around there over the last 20 years. And the Euro is taken some dominancy. You came onto the scene about 20 years ago, roughly. And you see the other currencies are hanging out there.

The Chinese currencies ticking up a tiny bit, but really, It’s the dollar is certainly predominant. The Euros is a solid number two. And really nothing else is really even rates. Here’s what I think why a bricks, currency is unlikely. I wanna first just hit that I think it’s actually not going to happen, and.

You’ve gotta realize, so what they’re talking about is actually creating a brand new currency. Okay. So it’s like the Europeans did with the Euro. They actually create a brand new currency. Okay. That is a massive. Undertaking. Massive undertaking. So they would have to make a new currency. And it’s one thing to, you can’t just make a currency.

You have to make it valuable. You have to cr, you have to back it. You have to create financial plumbing. You have to create bonds in this, create a place to put the money. It create central trade, the money. Yeah. Yeah. You would need to, you need to establish a central bank that would require a brand new central bank that doesn’t exist today to be built.

And they would have to agree who’s gonna man that central bank, who’s gonna govern that set Central Bank, what the exchange rates are amongst the constituent currencies. And here’s a biggie. So if you look at the bricks countries, China is the, is pretty much all of bricks. The other countries really don’t rate much.

China’s the number two world economy and the, And the other countries really don’t count. And here’s the thing is the China’s interests are not aligned with the other bricks countries. Already, the president they’ve had a, they’ve had a goal to, basically the stated goal is to make the Chinese, you won a, the, a dominant international currency.

You can’t have both a bricks, currency and a Chinese currency. They’re really not aligned. And I don’t, I think the only thing these countries, the bricks countries have in common really is, is let’s say, more despotic regimes and and a hatred of the US dollar and hatred of us hegemony.

It’s really, and that’s not a unifying force, right? The fact that you hate something is not, does not unify you. So it would require a whole new central bank, new currency systems, payment systems, swaps and hedging systems. This whole financial plumbing that is incredibly complex and incredibly, just a ton of work.

And would take a very long time to do. It also required the brick countries to agree on exchange rates and convertibility to their own currencies and the system to continually rebalance and require the bricks countries to give up cap capital controls. So right now the Chinese one, like everything in the country, is tightly controlled.

You cannot trade Chinese one inside and outside the country. They use capital controls to try and control the currency and main maintain its value. And, unlike the dollar which is freely traded wherever, however, whenever people want, you can do whatever you want with a dollar that you can’t with a Chinese currency.

So they’re gonna have to stop that, and that’s part of their, the way they control their country. And again, I just don’t think it’s very likely, I just want to make a quick comparison to the Euro. So the Euro took nearly two decades to implement two decades. And they set up a brand new central bank.

They staffed it with some very smart people. They built the whole financial plumbing system. They made a transition plan. And they all abandoned their own currencies. So the deutschemark doesn’t exist. The French prank doesn’t exist anymore. They were rolled into, and now those countries use the Euro.

So they, they had they decommissioned their own central banks, each individual country and decommissioned their own currencies. Made an exchange system in, into the Euro, and today the Euro counts for 20% of global reserves. And you saw how much trade but it’s took a long time and took a massive amount of effort.

I’m not an expert in the 

Ben Fraser: Euro or the history of the Euro, but it appears to me that just the political alignment, even the geographical alignment of the. Countries that use the Euro and the trade alliances seem a lot different than the proposal between the bricks countries. It just, it feels very different.

Bob Fraser: Oh, the European countries have a lot in common Yeah. With each other. And there’s a lot that’s not in common. There’s a lot of difference between Greece and Italy Sure. And Sweden and Denmark, but they are, they share borders. They share ideologies to a large degree. The cultures are somewhat different.

Languages are somewhat different, but there is a lot of commonalities. They are Europe, right? There’s not a lot of commonalities be between, South Africa or Saudi Arabia and China. Okay. There’s just not and I think everybody just, they just don’t like necessarily being under us hegemony where the US is dictating policies and these kind of things.

And, but again, that’s. That’s, that’s not gonna drive enough, enough effort, or it’s not gonna drive enough demand to go create a whole currency. So we’ll see. I just wanna look at the US versus the bricks countries and a bricks kind of economy and all compare to China, the US is the world’s largest economy.

It’s backed by the world’s strongest military. Why does that matter? The military is what secures trade routes and. If you look in, in history, the history since 1945, global trade has been policed by the world’s largest military, the United States. So the, and this is really historically an anomaly, really a hundred years ago there was no such thing as free trade across the globe, right?

And the nearest thing to it was the British who had the largest Navy, and they policed part partly the oceans and main maintained free trade routes the whole age of piracy and all that the golden age of Blackbeard and all that. That was, that, that was real. Where trade couldn’t exist.

It’s all global trade is maintained by the US military. And the US military is the only military that actually has a capability of projecting power in is in a significant way. Meaning we can go park a Navy and an Air Force pretty much. In front of anywhere and control that part of the world.

No other nation has that capability. And what it means is, it means there’s, we can enforce global trade. US also has rule of law. I know being a, an American, it can feel like it’s pretty darn chaotic. And there’s not a lot of, not a lot of respect for law, a lot of, political unity or all those things.

But the truth is, Our laws protect private property and they protect the, debt and mortgages and hedges and all these different financial, plumbing things, and it’s very well understood, well documented, and it’s very deep with very with law that actually works. Yep. Compared to, for example, let’s take China.

Let’s say you, who knows what, right? They’re changing the rules and they’ll simply they could simply nationalize your business or change something that, that puts you completely out of business. And we’re, we’ve seen that, we’ve seen them do this. The US has the world’s deepest and most liquid financial markets.

China. China, which is, the largest component of a potential bricks, currency, is a nation in decline. As I’ve pointed out in my mega trends and this is shocking to some people, and if you, if this is news to you, please look into this because this is fact. Yep. That the China is about to lose 70, about half of its population in the next 75 years to the population of China will drop by half.

That means it’s g D P drops by half unless they double their productivity per person. And that’s unlikely. And two thirds of its workforce, they’re a nation in decline. And if you, this is all from the UN population database and forecasts that I’m pulling my data from. And if you look at it if you look at the, there’s a confidence factor with their projections, right?

How sure are we, it’s a hundred percent sure China’s one of the most clear nations at, at all because. We can see how many young women they have, who the women are, the ones that have the babies and young women, we see what their birth rates are, and they’re simply not hardly any young women. Yep. In the country.

And through, through forced abortion, through the one child policy, through gender selection in that policy, were they favored males. It’s a nation that is a, that is, has seen its peak for sure. At a police state, they have no free elections. There’s no free par, free press, freedom of religion or speech.

Would you want to go park all your money, over there if you were a mil multimillionaire and start your sole business over there, you mean you’d know you’re at risk, right? It’s endemic socialism and corruption, tightly controlled capital markets. That’s illiquid with no rule of law. If you cross the government and you’re thrown in jail, they don’t have free elections, they don’t have free press, they don’t have, they don’t have, private property rights like we have.

So it, it’s simply not a place you would ever want to park money or trust to manage money. The dollar is, is extraordinary and in history. The only thing that comes close, I guess in modern history would be the pound sterling, which dominated for a couple hundred years.

You know when when the, as they said, the sun never sat on the British Empire, right? Cuz it was drillable and they were truly all over. So dollars can be used to pay for imports in nearly any country. Dollars are held as foreign currency reserves and dollars considered stable and safe from long-term fluctuations and devaluations.

It’s also versatile because dollar reserves can be used for any purpose. And the foreign currency reserves of all five brick nations are actually in the US dollar, right? Entire, almost entirely dollars can be converted and other currencies dollars can invest in US assets such as treasury bonds, which are the gold standard of global investment because they’re considered risk free.

So when you’re trading a lot of money you have a billion dollars, you have to park overnight or for seven days, what are you gonna buy? What do you wanna buy you as bonds? Cuz you just get, they’re so liquid, you can buy seven. You can buy a billion dollars worth of those things in a day and you can sell ’em the next day and you’re not gonna lose any money.

And, nothing’s gonna happen to it. It’s a good, it’s a good asset. Dollars can serve as debt, in, in any country. In fact most foreign governments debt are, is issued into US dollars. So again, all that, it’s just the dollar is just by far the most the most prolific and best currency in the world.

Here’s another point I wanna make too, is the currencies must be desirable by all parties. So I just wanna put a scenario out there as I was thinking about this. Let’s say Saudi Arabia, who basically exports about 500 billion a year in oil. And let’s say they say, we are going to only accept a bricks currency for our oil.

So you have to, they’re gonna, let’s say, formulate this new currency and to buy our oil, you have to buy it in a brick. Okay, so then first of all, it wouldn’t affect the US right? Because we don’t import Saudi at all. But it, but Europe does. So Europe would then say, okay, we will buy, we will con take our euros and we will convert it into bricks.

Then Saudi Arabia gets a bunch of bricks. And what are bricks good for? Where you can dissolve it into its five constituents, currencies of rubbles. And Chinese you want, so what are they gonna do with rubles? What are the Saudis gonna do? What are the size gonna do with Chinese wants?

They don’t want anything from over there. They want to build buildings, they wanna build devs. That’s gonna be Euro, that’s gonna be primary. Europeans are gonna do that. They’re gonna want euros. They’re gonna switch it all packed to euros. They don’t want the stuff that these countries have, which is pretty much raw materials.

And how can they spend it? And then, okay, so then they got all these bricks. Then they’re gonna have to store it someplace. So they gotta have billions of dollars worth of temporary money storage. What are they gonna store it in? Chinese government bonds? I just don’t think anyone has any confidence in that.

You’re, the number one place to store money is US government bonds because they’re very safe. And here’s a chart You can see this is since the 1970s. This is 55 years of the US dollar. And you can see in spite of all the the I guess fear the dollar, just, motions along, and it’s not that volatile.

It does go, it has its ups and downs but it’s certainly not. Not crashed and Right. Even when the Euro came, everybody could have said, oh, that was that, that’s gonna destroy the dollar while it didn’t, so yeah, you can see the euro coming in there. So dollars have been very stable.

So the bottom line, and I have actually said this for well over a decade, that the US will be the world’s strongest currency for at least the next several dec decades. While I’m extending that out, it’s still gonna be the strongest world’s currency for the next several decades. There’s nothing comparing, there’s nothing, no comparison.

The euro is the closest and it’s a decent currency, but it has a lot more problems than the dollar does. And certainly every other currency has more problems. And the bottom line is those propagating dollar fear are selling their protection packages. Yep. And so just take that with a grain of salt.

And they’re wanting you to do that. The final thing I want to say just about the dollar here. Is, let’s say the dollar did crash by half. Let’s say, you woke up and the dollar was crashed by half. So that means, you could exchange it for half as many euros and oil would be priced and double because we’re importing it.

All imports would go up and up by half. But our, on the other hand, our exports would drop by half in value. So that means you could buy an iPhone for half the price if you’re overseas. Means a goodbye, a Miami beachfront condo for half the price. It was yesterday. You could buy two Boeing airplanes for the price of one Airbus.

Guess what would happen to Boeing airplanes? Yeah. They’d be you crazy US exports would explode as we became the cheapest oil producer. By far, yeah, than anyone else. US manufacturing costs were dropped by half, making the US twice as attractive as a manufacturing destination. The stock market would skyrocket.

And anticipation of explosive earnings. So you gotta realize the dollar is backed by a massive economy with incredible places to invest. This is the best country in the world to invest in. Yeah, the best stock markets, the best companies, the best real estate best, and all that stuff would be on sale to a foreigner by half.

It would quickly, money would flood in. And so the dollar is simply not, don’t buy the fear. 

Ben Fraser: And I think that’s exactly, it is, it’s generally fear-based and whoever’s propagating the dollar’s about to crash, it’s generally a headline. And there’s usually an angle behind, the motivation to say that.

And it’s a recurring, theme that is al there’s always the demise of the dollar for some reason or other. And this happens to be the latest in, the, the ongoing commentary on it. But I do think. This is pretty compelling because a currency doesn’t live in a vacuum.

It’s backed by this economy that is very strong, largest in the world. Yes. It’s not going anywhere. 

Bob Fraser: If you wanna buy an iPhone, you’re gonna need a dollar to do it. Yeah. If you want to buy a Boeing, you’re gonna need a dollar to do it. Yeah. So it’s, we got a massive economy that is extremely vibrant and innovative, so best com, best companies in the world are headquartered here yeah.

What do you think 

Ben Fraser: are the primary reasons that they’re exploring this? To, to your point earlier, it doesn’t seem like the reality of this actually happening where they’re formalizing a brand new currency, creating a new, central bank and the, all the financial plumbing required to do that.

It’s probably not gonna happen. So what’s really the motivation behind these countries doing, it seems more like political posturing, right? To try to get, things in their favor from its 

Bob Fraser: expo is who is pretty peeved. Yeah. He’s under sanctions and he is trying to, he doesn’t like having dollar hegemon where we can dictate what happens.

Sure. What he can and can’t do. He wants to be out from under that. Let’s, establish our own currency and then the, that kind of resonates with the Chinese, cuz. They want, they hate the dollar, they want the, they think the Chinese should be the greatest country in the world with a fixed dichotomy.

And they’re trying hard to make their currency better, and they want more esteem and recognition globally. So they want their currency. So they’re they’re saying, yeah, us too. But it’s not it’s really, and it’s 

Ben Fraser: Brazil and Yeah, 

Bob Fraser: the other countries where the same thing.

It’s just they don’t like us hegemony where we’re dictating what happens in the fight to their, they want to be free of the shackles of the US dollar. But, let’s hit another question too. One of our, one of our writers wrote in says, what about the US debt?

Yeah. Yeah. And so there’s this idea that, Our deficit spending. So there’s, two components of debt, right? One is deficit spending where we spend a lot more money as the US than we take in taxes. Yep. And then that’s accumulates by as we issue bonds, we borrow money and we issue bonds in order to fund that deficit.

So it accumulates over time and that it has been on fire. Both the deficits have been. We have been extreme fire negative way, where we’re taking a lot more extreme and negative and the debt has been compounding rapidly. And you’ve got, Obama. I started at the end of the Bush era with the the great financial crisis, stimulus.

And then Obama took it on steroids. We’ve had very, a lot of spend and, tax and spend are just spend and don’t tax kind of leadership in place. And the deficit winning is through Obama era. Went through the roof. Trump didn’t scale it back.

And then you look at. Interest rates are 

Ben Fraser: going up now. So the cost 

Bob Fraser: of that debt and then the stimulus with the covid was been incredible. What they did and yeah. Meanwhile, so the government just continues to expand and expand and then, yeah. So now the concern is how does this end?

How does that end? And. And yeah, interest rates are now going up. That means the US is paying a large portion of, it’s tax, it’s interest bill. Yeah. Keep going up. Is keep going. So what happens? So this, does this mean the end of the dollar and the end of the US dollar confidence in the dollar and the dollar crashing?

Let me just say, let me give you a couple perspectives here. Yeah. First, let’s give an international perfe perspective the dollars value. Is determined by its peers. Yes. So the value of a dollar is determined how, it’s how it trades relative to a Euro or a yen, right?

They’re all doing the same thing, so they’re all deficit spending as bad as we are. So it doesn’t, if somebody decided to not deficit spend and decided to have a great currency, you would see it, you would see it go, you would see it rise in value. The other thing is that, so the US has had a debt to GDP ratio over a hundred percent in the past.

In fact, it had about 70 years ago Yeah. Is almost as high as it was now, and. And, we extremely high debt. And that was, and we recovered from it. What happened? Yep. That was 1945. And the war debts. It’s, it is unfortunate that even without a war part, definitely manage to get ourself in the same pickle.

But how did the get out of it? Here’s what happened, and this was a, there was a great book that I loved and It was by by a couple har Harvard economists called, this Time is different. It’s by Carmen Reinhart, or Kenneth Ken Rogoff and Carmen Reinhart. And they studied 800 years of financial crisis and I love that book.

But they came up with another study. They showed basically how deficit spending had been handled throughout history. And in most cases, deficit, high deficit spending was not answered by defaults. We’re not gonna pay our debt back. Where a lot of people today think that’s what the answer’s gonna be.

But the truth is, moderate levels of inflation are how it’s been answered, right? So if you, if think about this, so if there’s inflation, that means it takes more money to buy something tomorrow than it does today, but it means you it, it takes less money in real terms to pay off a debt tomorrow Yep.

Than it does today. It’s cuz debt is negative money. And so what happens? And I’ve said in the past, I said, inflation is a massive transfer of wealth from savers to borrowers. Yep. So if you can I was in Zimbabwe in 2007 and when they have a currency crisis, and by the way, you know what, when their currency failed, does Zimbabwe, do you know what started happening?

What they used for currency, the US dollar. That was the only thing that started trading. But literally, I was there when a guy would take a grocery sack full of money to fill a gas tank with a car and a pastor there. Went to his congregation before all this happened, and a guy I knew and said, guys, he saw what was happening.

He said, guys, Do whatever you can to borrow as much money as you co possibly can and buy real estate Uhhuh. And he bought a 300,000 Mediterranean mansion, thinking like a six. Think of a 6,000 foot six. 600 square, sorry. 6,000 square foot mansion, right? Yeah. For 300,000 bucks. He literally paid it off with a grocery bag full of money a couple years later.

You think about that? Yeah. What paid it off? Inflation debt. Inflation debt. So debt is diminished by inflation. So all it takes it just, so at 8% inflation, that debt drops by half in 10 years, right? At 6% inflation, it’s a little bit longer. I have the calculation somewhere. Don’t have it in front of me But you get the idea.

So a little bit of inflation actually solves it. And this is historically how high Detonations have solved their debt crisis by a little bit of inflation. Yep. Is it possible that we get, so out of our, out of we start borrowing so much and the rates the the interest rates scope so high.

We start we start having to print even more money. And again, it gets us, gets into a spiral. So here’s what happened in the 2008 financial crisis, right? They basically printed 3.7 trillion worth of money, and the Federal Reserve monetized it. They actually, so I believe before we actually get to a real crisis like that, the federal, they’ll basically tap the Federal Reserve on the shoulder and say, Hey, buy this debt.

What that means is yeah, the government borrows the money. So you buy a bond, you go to your broker, you buy a bond, and that government the money goes to the government and then they say to the Federal Reserve, buy this from us. So the Federal Reserve prints money. Now they don’t actually print money, but you get, yeah, I’m just making, I’m simplifying.

And they buy those bonds. So now the Federal Reserves owns the debt of the US government, and they can simply, they bought $3.7 trillion. By the end of, by the end of the great financial, by about, mid 2010. What if they said don’t have to pay us back? They could have what would’ve happened?

Nothing. Nothing would’ve happened. They just said, don’t pay us back. You have forgive it. And that was shocking to me cuz I was, at that time, was a hard money economist. I was an Austrian economist and, Hard many economists and to realize that one, when they did that, I expected hyperinflation habit didn’t happen.

And we actually had, we’re struggling with deflation, right? I believe the Federal Reserve could monetize and get us out of a lot of this. Now, what happens at some point it is inflationary. It is inflationary. So if the government monetizes a lot of money, so let’s say they, the Federal Reserve.

Monetize the entire US deficit right now, just monetize it. Then I think confidence on the dollar would drop. Sure. And that means the dollar’s of value would drop. Would you wanna own that or a euro? You’d wanna own a Euro at that point. So you the confidence would drop, and so the US currency would drop in value.

It wouldn’t drop precipitously, it would drop some, right? And yeah, the more severe it drop. But then that’s its own, that’s its own fix. So what happens is when you see currencies drop, inflation begins to happen because imports right, costs more money. And then as soon as you have inflation, while that wipes start wiping out the debt, you follow me?

So it really is. It really is It’s not as bad as people say, but we, that said, I am economic conservative and we actually should be, yeah. Trying to balance our budget and we shouldn’t be spending as much money and we, we have too much government and too much government spending and too much waste.

And it really should be checked and we need to check our politicians. But that said, It’s not existential crisis. It’s not an existential crisis. It is. It is weird. This US government is going to continue and going to going to be very successful and our economy is gonna continue to be very successful.

Yeah, 

Ben Fraser: I think you made the point, but so many people think of the US or the US dollar, the economy in a vacuum, right? There’s a lot of problems in our economy. There’s a lot of problems politically, et cetera. There are, but. That’s not it’s all relative, right? It’s the way the US dollar is, priced is relative to other economies and other currencies.

And so there’s, you have to look at the broader scope of, okay, the US dollar’s not perfect. This economy is not perfect, but it’s still the best option we have. And 

Bob Fraser: Right. And I wanna make one more point here too. So the only time countries go bank, so US cannot go bankrupt. And there’s, yeah, there’s a, there’s, here’s the reason.

The only time countries go bankrupt is when you borrow money in a currency you cannot print. Okay. Which happens. Yeah. Okay. Happens in Brazil, happens in Argentina. They borrow money in dollars. They can’t print dollars. Last I heard. At some point they can’t pay that back. And that’s the problem.

It’s also a problem in Europe. Because they can’t print euros. Like the individual countries that are doing their debt, borrowing spending, they can’t print their currencies and they, so if there’s bankruptcy, it’s gonna happen. It’s gonna be in Europe and it’s gonna be in other places.

In the United States, we can never go bankrupt because it’s called the rights of senior age. Senior Ridge is the right to make money, and as long as you can make money, you can really never go bankrupt. Right now you can devalue that money. Sure. But again, as I plan it out, devaluing that money by printing too much solves the problem.

It is self-correcting. Yeah. No, that’s 

Ben Fraser: Very interesting. Thanks Michael for writing in the question. And definitely love the feedback on some of these topics as we. 

Bob Fraser: We yeah. Talk about him and bottom line guys don’t bet against America. Most successful investor of all times is Warren Buffett, and he says, don’t bet against America.

And he, and you bet against America. You’re begging, you’re betting against me. You’re betting against him. You’re betting against the entrepreneur, the inventor. We’re innovating, we are creating, we’re adapting. We’re changing what we’re doing to collectively to create a vibrant economy and it’s not a thing it’s human beings who are constantly innovating, changing, and adapting. Go. Don’t bet against that. Don’t ever bet against that. Yep. So 

Ben Fraser: Awesome. Good stuff. Thank you so much for listening to the podcast. Hopefully you got a lot outta this episode and feel free to share it and rate and review.

We always appreciate that and tune you next time.

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