The End of the Dollar is Coming, and We Will See It

Why Every Currency You Trust Will Disappear

Source: BBC

I'm going to tell you a universal truth, and I believe that only a few of you (1-5%) are aware of it.

ALL CURRENCIES THAT HAVE SUFFERED UNCONTROLLED INFLATION THROUGHOUT HISTORY HAVE DISAPPEARED.

This is one of the things we must keep in mind in our daily lives. We treat money as something sacred, but in reality, money means absolutely nothing.

Let's recap how the stages of history have unfolded and how all these forms of money have disappeared, and how we will see the dollar disappear or at least no longer be the reserve of value and become a currency used among the lower classes of society, just as cash is in many developed countries.

• Roman Empire: They depreciated their currency by including less and less grams of gold in it. They even tried to do it with silver, but these coins wore out with use, something that did not happen with gold.

• Byzantine Empire: Suffered a severe depreciation of its currency, the solidus (nomisma). Initially, the solidus was known for its purity and stability, but over time, the emperors began to reduce the gold content to finance their expenses.

• French Revolution: The revolutionary government issued large amounts of assignats (papier-monnaie) backed by lands confiscated from the Church and the nobility. However, the excessive issuance of these bills without solid backing led to hyperinflation. The economy collapsed, exacerbating political and social instability, contributing to the rise of Napoleon Bonaparte.

• 19th Century: The 19th century is known for being closely tied to the gold standard, and this contributed to a period of notable economic growth and financial stability in many parts of the world (Industrial Revolution, international trade, etc.).

• 20th Century: In the early 20th century, with the First World War, we saw how all the nations that had adopted the gold standard abandoned it. This led to the Great Depression.

Throughout history, there has been only one way to eradicate this: through gold. This metal has unique properties. In fact, countries that have tried to do the same with silver have always failed. For example, the UK, China (late 19th century), and India. It is known that gold cannot be extracted at a rate higher than 5%, which has made it an asset worth possessing throughout history.

Warren Buffet has always been very critical, saying that gold does not produce cash flows and does not generate any business profit, and both statements are true.

This is the thesis of many people, but let me tell you the mechanism of money.

Companies (in the USA) trade and do business in dollars. The more they do, the more dollars they receive, and therefore, they will receive more money. Where does this money come from? From a monetary mass that central governments control.

Now, this country has printed bills, which are worthless so that people can buy more products from that company, raising the stock price. However, within government balances, there are certain things that will never change:

1. Gold: The demand for gold is fixed, and the growth is known. Unless we find more gold in the space race.

2. Habitable land: The same as above.

3. Bitcoin: Limited demand to 21 million.

This will make the revaluation of the previous three closely linked to the dollars in circulation.

For example, Apple can only sell more phones if people have more money (or credit). This money (or credit) is obtained from banks by increasing the overall balance of the central bank (in the USA, the famous M2).

Crunching the numbers:

% increase in printed money globally = % increase in the price of gold + % of gold found.

If it is printed at a rate of 9%, we could say that the increase in the price of gold would be around 6-7% (as has happened since 1971).

Now many of you will come and say that NVIDIA has given a higher return, and it is true. And surely if you say that the S&P 500 has given a higher return, which is not true (next chart). But if it were, this would be because the US has been a world power; most returns have come to the US with its global companies like Apple, Amazon, etc. Much of that money has come from Europe (in Euros), which has dragged down the performance of European stocks

.Therefore, the question people should ask is whether the total set of all the world's stocks has given a higher return than gold. The answer is NO.

All currencies that have not been tied to any precious material (mainly gold) have disappeared or, failing that, have lost much purchasing power.

When the dollar is surpassed by other currencies (whether physical or digital, gold, or Bitcoin), the index will not go down; we will simply realize that its appreciation is useless. In fact, one of the indices with the highest return has been Argentina's. What good is this? For nothing, because although your pesos may revalue, every day you can buy less in your country and much less in the rest of the world.

Now our portfolio on detail: