the dollar is starting to fall, and the best way to understand why it happens is to think about the physics of energy. Nicola Tesla once said, If you want to find the secrets of the universe, think in terms of energy, frequency, and vibration. But there's also a lot of different types of energy, like, for example, chemical energy. When we eat food, our body is converted to chemical or caloric energy, and over time, we burn and use it. Even when we're completely still, we're burning energy. There's also electric energy that we store inside of batteries, and over time, electric energy also dissipates because of internal resistance. Then there's the energy of motion, kinetic energy, and we harness that energy through nature, something like the water wheel. There's thermal energy stored in heat, which over time loses energy as it gets colder. There's the very violent nuclear energy, elastic energy, solar energy, but there's also another kind of energy that most people just don't think about, and it's the most important one of all of them: economic energy stored in this. This is an

abstraction of our energy. We convert our time into this, and our energy is denominated in these numbers. When we trade them, we are trading energy, and like all the other energies, the second law of Thermodynamics says due to forces like entropy, friction, resistance, and heat loss, given a long enough period of time, it also eventually disappears. Economic energy has the same problem because every time it vibrates and changes hands, it loses potency thanks to the forces of taxes and the printing press inflation. That's why over the last four years, the US dollar has lost about 25% of its purchasing power. That means your money now buys a lot less now than it did just a couple of years ago. And recently, CNBC put out a video about why all of that is a good thing. It was titled How a Weakening Dollar Can Help American Consumers. And if you read the comments on that video, I think it kind of reflects how a lot of us feel about it, which is a little suspicious, like what are they going to tell us next, that high debt will benefit the economy and

then next video how high prices and inflation help American consumers and then eventually how living below the poverty line is good for you. So, of course, after watching that video, I had a lot of questions, like why does the Dollar move up and down in the first place? Why couldn't it stay the same? And if it is going down like the reports are saying, who does it actually benefit? And if it's a problem, how do we fix it? And one solution that's been proposed recently is to put price controls and ban companies from setting their prices too high. And is that a good idea? Because we have done that in the past, and the more I looked back at history, the more I realized these questions have even more interesting answers. And that's what I want to help explain. So, with that said, let's get into it. Hi, my name is Andre J. Hope you're doing well. Come for the finance and stay for more Finance. In his keynote speech, billionaire Michael Saylor talked about this really cool concept of economic

energy, and he asked this interesting question about how long does an asset last, assuming that its longevity equals its value divided by its maintenance cost. He goes through a couple of different examples of how long it would take an asset to decay to the point where its value goes down significantly. He starts with Argentina's peso at the rate of inflation of 98% on average. That economic energy would last about 2 years before it isn't very useful. The Turkish lira, about 3 years. The US dollar, under the average monetary inflation of 7% over the last century, about 14 years. So instead of holding economic energy in something that has a high maintenance cost, what if instead that energy is converted into something like an asset? Now, a hedge fund, by Michael's calculation, would be a 25-year asset. A treasury bond that pays interest would last about 30 years. And something like an actively managed mutual fund that charges 1% would be a 100-year asset. So economic energy lasts longer the more valuable it is and the less it costs to maintain it. But

Unfortunately, according to the US Gallup poll, almost half of all Americans are not even investing. They hold their economic energy in a savings account, and that means the value of the dollar should be important to a lot of people. So, one of the questions I had is, why does the dollar fluctuate in value? And it turns out there's four main reasons: the Central Bank interest rate, the economy's performance, inflation, and geopolitics. Now, what's interesting is while the rest of the world is lowering its interest rate to make sure those economies don't go into a recession, the US is holding its interest rate pretty high, and that attracts a lot of money to come to US Treasury bonds, which makes the US dollar stronger. But one of the reasons the dollar is going down right now is because of geopolitics. The US dollar has been the world's Reserve currency for decades, but almost every single month, another country leaves the dollar standard to join the BRICS Alliance, including the latest Iran, Malaysia, and Thailand. All these countries want to diversify their

Payment systems away from dollars, which means they'll need less dollars, and over time that will weaken the dollar strength. So, the next question I had is, who actually benefits from a weaker dollar? But first, back to economic energy, because one of the best ways to store economic energy is by investing. And a platform that's designed to help you do that also happens to be the sponsor of today's video, Mumu. Mumu is an investment and trading platform that provides pro-grade tools, data, and insights to investors across the US, Canada, and Australia. And according to a Morning Star report, dividend-paying stocks often perform better than non-dividend-paying stocks when interest rates go down. But with so many dividend stocks out there, how do you pick which ones? And one way is using Mumu's high dividend yield feature. You can set your preferred dividend yield range, select a stock with a share price above $1 and a market cap of at least $10 billion, and you'll get a list sorted by dividend yield. You can also check a company's dividend payout.

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asked for it. We've been hurt, in my opinion, very badly by our own Federal Reserve, who has also created a very strong dollar. That's something nice about a strong dollar, but it makes it much harder to do business outside of this country. The question is why, and this is where it gets really interesting, because a weaker dollar can be beneficial, especially if you're mostly an investor. In the early 2000s, for example, the dollar became much weaker against the Euro, and it dropped from 85 cents a euro in 2001 to over 1.50 by 2008. At this time, US investors holding European stocks saw their returns amplified when converted back to dollars. Just Google the companies that derive a big portion of their profits overseas, and you'll see which ones stand to benefit. But something else that goes up in price when the dollar goes down in value are commodities. After the financial crisis of '08, the dollar weakened, and gold prices went up from about $700 an ounce in late 2008 to almost

$1,900 by 2011. Of course, there's another commodity that has benefited from a weaker dollar: Bitcoin. When the dollar is depreciated, Bitcoin's price has almost always moved in the opposite direction, which makes sense when it takes more dollars to buy a thing; that thing becomes more expensive. So, if you have a little bit of money and you like to invest that money, chances are a weaker dollar could be a good thing. But if you're someone who does not want to invest that much and you're a consumer that likes to travel, then a weaker dollar could be a bad thing, especially because the United States imports a lot of stuff. And if the stuff we buy becomes more expensive to import, then it becomes more expensive to consume as well. And oil is a good example. Between 2002 to 2008, the US dollar fell by around 40%, and during the same time period, the price of oil went up, up from around $20 a barrel in 2002 to over $140 per barrel by mid-2008. So, my

follow-up question to all of that is what can we do to fix it, and one of the ways to maybe fix this was a proposal by a presidential candidate who said we should have a price control, a ban on company's price gouging. And we've tried that in the past, but the result was really bad. It all started in 1971 with executive order 11615. For 90 days, President Nixon made it illegal to raise the price of food, rent, and wages. The time has come for decisive action, action that will break the vicious circle of spiraling prices and costs. I am today ordering a freeze on all prices and wages throughout the United States for a period of 90 days. But what ended up happening was the complete opposite effect. The price of stuff went way up, and it became known as the Nixon shock. Because one of the first things that happened was a shortage of supplies, because when the price is artificially kept low and suppressed, producers can sometimes find it unprofitable to sell that stuff. So they

end up making less of it during the 1970s. For example, price controls on gasoline led to fuel shortages. Long lines at gas stations started to become pretty common, and in some cases, gas stations ran out of gas completely. And it wasn't just limited to gas; price controls on other stuff led to shortages across the whole economy, and that created an opportunity for a black market to exist. Because human psychology says when something that we need to buy is scarce, we tend to hoard it; we want more and more of it. And because people knew there was a shortage of fuel, they would buy not just what they needed but a little bit of extra, extra just in case, and that made the shortages even worse. So, people started selling their extra stuff for a little bit of profit. You could wait in line for a couple of hours, or you could buy my extra oil for a little bit of extra dollars. And that's what made everything more expensive, which contributed to their inflation. But we don't even have to go back as far as the

1970s because this just recently happened with toilet paper. Remember, anyone who had a little bit of extra started selling it on the side for a bit of profit, and he became a meme. So, we've tried price controls in the past, and it did not help the economy; it made it worse. And as soon as this proposal was publicly announced, the dollar became weaker. So, for those who are not familiar with history, it can sound like a good idea, but history did not forget. But then I had another question: what does all of this mean for people's jobs? Because there was a revision from the labor department which revealed that the United States added 8818,000 fewer jobs than previously reported over the last year. In other words, the US economy actually created almost 1 million less jobs than what was first reported, and that is the single biggest revision since the year 2009. So now that this news has come out about these weaker jobs, which points to a slowing economy, this is also another reason why the

dollar could be getting weaker, and because the economy is getting weaker, the Federal Reserve wants to make sure we don't go into a full-blown recession, which is one of the reasons why interest rates could be coming down. In fact, the market is predicting that the Federal Reserve will lower interest rates in September, and it's pricing in four interest rate cuts. A lower interest rate attracts less money to be parked into U.S. treasuries and assets, which means a weaker dollar. But economists also theorize that a weaker dollar could help with employment, but it depends on a lot of factors. Now, if you made it this far into the video, here's what I personally think. If you watched my video last week before the revision was announced, I said exactly that in my video. This year, we're in an election year, so all the numbers that I'm seeing reported by the government, I tend to think the real numbers are probably not as good as what I'm seeing. And a week later, that news came out. So yes, the U.S. economy is slowing down, and every 100

days that pass, we add another $1 trillion to the national debt, which means we either have to pay down the debt or lower interest rates real soon, which I think is what we're going to do. Now, I don't know 100% for sure if interest rates will go down in September, but it looks like there's a strong possibility. Either way, it looks like it's a really good time to be an investor holding assets, and if you're mostly a consumer that's not investing, I'm going to repeat what I said in my last video, which is to please make sure that you have at least six months of expenses built up in an emergency fund. And as for me, I'm going to continue holding my assets, investing, and holding a little bit of cash, which is exactly what people like Warren Buffett are doing right now. But I'd love to know down in the comments below how you're preparing for these changes. As always, stay informed. I hope you have a wonderful rest of your day. Smash the like button, subscribe if you haven't already, and don't forget to grab

your free stocks links are down below, and then go track them automatically with a spreadsheet linked down below in my Patreon. Thank you so much for watching this video. I'd love to see you back here next week. I'll see you soon. Bye-bye.

The Dollar’s Downfall Begins: What’s Causing It and Who Benefits?

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The Dollar’s Downfall Begins: What’s Causing It and Who Benefits?

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