Written by Keith Dicker, CFA, Founder & Chief Investment Officer
Over the last 6 months, the US Dollar has declined between 5-8% against a few of the world’s major currencies.
This movement has ignited a hysteria amongst medias proclaiming the US Dollar is on the verge of collapsing, and relinquishing its status as the world’s reserve currency.
In this issue of the IceCap Global Outlook, we share the following:
- US Dollar is NOT on the verge of collapsing
- US Dollar is NOT on the verge of losing its world reserve currency status
In order for these dramatic events to occur, the following must exist:
- an alternative currency (or currencies) to replace the US Dollar
- an alternative system to replace the US Dollar system
IceCap does not have a linear view on the US Dollar. One day, the US Dollar will be replaced as the world’s reserve currency. Yet, before this happens, it first has to surge and create stress across all other currencies.
In some ways, today’s hysteria about the crashing US Dollar will be correct. Yet, the irony lies in that it will first appreciate rapidly, therefore causing crashes in other currencies along the way.