Is the dollar really that weak?

Some people think the dollar will soon collapse. They say so because it is only valuable through government fiat. However, the dollar’s weakness is shared by every other major national currency the world over. Anyway, a common constant danger or worry is that government could print too much money for political reasons or to support wars.

IMF has been installed as a watchdog. It was created to monitor the Federal Reserve and its commitment to Bretton Woods. Today, it uses other reserves as a discipline on Fed activity. In case, governments and investors want to shift away from the dollar en masse, short positions could mostly hurt anyone with assets denominated in the currency.

One precaution is that Fed must not create money too much.

Will the dollar collapse?

That’s a multi-million question. Yes, there could be some scenarios where that happens. One is the dual threat of high inflation and high debt. However, if the U.S. government struggles to afford its interest payments, foreign creditor may dump the dollar. That single move could collapse the it.