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What’s up, everyone? Today, I want to give you an update on new World Reserve Currency changes!
Listen up, because this greatly affects you as a fund manager and human being!
Last week’s headline:
China Completes 1st Yuan-Settled LNG Trade with France
Liquefied Natural Gas (“LNG”) is natural gas that has been cooled down to liquid form for ease and safety of storage and transport.
Why would France break the Bretton Woods Agreement to trade oil not using US dollars?
This move could hurt them and the US.
Here’s why, but let’s review back up a bit…
History Lesson
After WWII, there was an agreement made that all nations would trade using USD if the US provided a navy for them.
This agreement created a new World Reserve currency that has been used ever since.
So, that means that ever since 1946, Germany has been buying oil from Saudi Arabia in USD, for example.
Last March, I made a video on WSJ’s article, “Saudi Arabia Considers Yuan Instead of Dollars for Chinese Oil Sales.”
After this announcement in June, the FED started raising interest rates and issuing bonds to pull money supply from the markets.
According to economic textbooks, inflation should devalue the USD.
But the USD has somehow increased in value as inflation has increased.
Back to the timeline…
In July, we sent 3 aircraft carriers to Taiwan to protect them from China.
At the same time, the US banned chip manufacturing in China and passed a $54B Chips Act to develop FAB facilities on American soil.
6 months later, Europe switched LNG dependency from Russia to the US.
Now, with the sure indicators of a recession, bank closures, crypto hypotheses, and now France using Yuan to trade LNG, you might be thinking how this all applies to you.
3 Rule of Investing
In times like these, I try to remember the following:
- Don’t fight the FED
- Don’t fight the FED
- Don’t fight the FED
Like I said in my video…
“I believe the FED is the most powerful organization on planet Earth.”
The FED has many responsibilities, but their crowning commitment is to protect the US dollar.
We work our whole lives to earn what the FED prints. And if people aren’t using their product, those people never come out on top.
Many people criticize President Biden for shutting down the Keystone Pipeline when he first got into office because it was a factor in raising gas prices.
However, it forced us to trade with Saudi Arabia using USD, which is a very good thing for us!
Ending Note
Last year, JP Morgan was fined $920M for manipulating the price of gold for 10 years.
I bring this up, because if JPM could manipulate the price of gold, could the FED devalue the market on bitcoin, the Euro, or the Yuan?
Is it possible?
I think the US would rather start a world war than roll over and give away the value of the USD…
Conclusion
So, that’s my update on new world reserve currency changes!
If you want to learn more, buy tickets to Fund Launch Live – Miami in May!
That’s it for today, though!
Thanks,
Want to get direct guidance for your fund? Schedule a time with my Fund Advisors!
DISCLAIMER: This content is for educational and informational purposes only. It is not to be taken as tax, financial, or legal advice. You should always consult a legal professional before taking action. Furthermore, this is not a recommendation to buy or sell any security. The content is solely just the opinion of the authors.
