In recent years, rumors of an impending Global Currency Reset (GCR) have been circulating on the internet, causing both intrigue and concern among investors and the general public alike.
Proponents of this theory argue that the world’s major currencies, particularly the US dollar, are on the verge of significant revaluation as part of a deliberate restructuring of the global financial system.
They claim this reset is necessary to address economic imbalances and create a more level playing field for developing nations.
However, it’s crucial to approach the theory of a global currency reset with a critical eye before drawing any firm conclusions. Let’s examine reality for a bit.
US Dollar’s Clear Dominance
The US dollar has maintained its status as the world’s primary reserve currency for nearly a century, thanks in part to the United States’ economic strength and the dollar’s former gold standard.
Despite facing various challenges over the years, the US has consistently worked to protect its currency’s value and global role. Many international contracts, including oil exports, are still being denominated in dollars.
This dominance has granted the US a unique advantage in managing its debt, as it can issue debt in its own currency, providing greater flexibility compared to emerging markets.
In fact, more than 85% of all foreign exchange transactions include the dollar as a pair! This is how widespread the USD’s usage is.
Economic Doomsday Predictions: A Historic Perspective
It’s important to note that predictions about the imminent collapse of the US economy are not a new phenomenon.
For the past five decades, various individuals and groups have been sounding the alarm about an impending economic catastrophe, which has yet to materialize.
Quite frankly: anyone who left USD denominated assets out of their portfolio the past few decades has missed out on returns.
While crises and recessions are an inevitable part of the economic cycle, the global financial system has weathered numerous storms, from oil shocks to world wars.
Proposed Models for Global Currency Reset
Several models have been suggested for a potential GCR, including the adoption of a new global reserve currency, the emergence of regional currencies, or a shift towards crypto.
Despite fair criticism over the USD, other fiat currencies have plenty of their own issues. The Euro and Yen, which are respectively the second and third most-used currencies in the world, have consistently underperformed the dollar.
