If the dollar collapses, then what!?

[jimcasada]

First, do we have two Bubbas or two different accounts by the same guy?

I would not expect the dollar to actually "collapse," but when it significantly declines in value (as it has been doing), that directly affects the real value of all our TSP accounts (and any other savings held in dollars). The dollar's value and price inflation are like two sides of the same coin.

[jimcasada]

I heard some folks discussing this study on the radio. They said that if it was not for all these tariffs, the US inflation rate would be about 2%, instead of approx 3% annualized rate it is currently at. Makes me imagine where Fed cuts would be if we were at 2%.

https://libertystreeteconomics.newyorkf ... s-tariffs/

[evilanne]

Looks like there are 2 different Bubbas

[IRQVET]

It just "feels" like de-dollarization and its current decline is putting alot of stress on the market, and people are shifting into asset classes as a byproduct to protect what they have. I truly wish (outside of the G-Fund) there was another asset class we could shift into when the market is behaving this way.

[jimcasada]

Screenshot_20260828_130959_thinkorswim.jpg

Dollar is up over 1/2% today on Warsh comments at Jackson Hole. Since everyone's accounts here are valued in dollars, that's like a .5+% gain for everyone today. Hopefully this recent slide down in the Dollar's value can reverse itself starting today.

2-year Treasury yield jumps as Warsh says Fed may 'have work to do'

https://www.cnbc.com/2026/08/28/treasur ... idappshare

[Optimus187]

Screenshot_20260828_130959_thinkorswim.jpg
Dollar is up over 1/2% today on Warsh comments at Jackson Hole. Since everyone's accounts here are valued in dollars, that's like a .5+% gain for everyone today. Hopefully this recent slide down in the Dollar's value can reverse itself starting today.

2-year Treasury yield jumps as Warsh says Fed may 'have work to do'

https://www.cnbc.com/2026/08/28/treasur ... idappshare

Thats gonna be tough. Im sure I wrong but the current trends really pointsñ to dollar weakness continuing . Walmart didnt make money last qt. People arent buying. Oil is too high and gas prices are hurting everyone including retailers. Oil typically pull dxy up but at this point its hurting dxy. Sachs just said a hike is not what the numbers are saying. Admin wants Korea to build chips in US but Silicon Valley has a multi year buying commitment with Korean chip makers. Ive been in I fund for past 2 years due to dollar weakness. That will continue. Picking a fight with Canda wasnt smart for the dollar. Canada currently ranks as the strongest currency.

Check out marketmilk for currency strength and trends. The dollar is bearish and weakening even with oil so high. Many blessings to all

[IRQVET]

I-Fund is still tied to the dollar when you buy and sell it, so although you get limited protections, they are just that "limited."

I was watching a video from a financial YouTube guy that talks unique asset classes and U.S. dedollarization. He is a younger guy who didn't come from much, but accumulated a decent amount of wealth- and moved outside the U.S. He stresses finding historically speaking solid asset classes that go up in price. His favorites are real estate, art, crypto, and collectables. He jokingly said once he bought a kids tool collector set, and he bought a ton of them, just to hold for several years and they 4,000x 'ed in value by the time he sold.

I'm starting to educate myself on this subject, as it appears the world around us changing a bit- and I'm just trying to keep pace and expand my knowledge base in this space; as I am no financial guru. All I've done is aggressively contributed into my TSP, and benefitted from 3 really good real estate transactions, that gave me a great financial footing early on, and I stay out of large consumer debts (No new cars for this guy). Now I'm just trying to expand that footing as I see traditional finance go into sort of a flux, the the strength of the U.S. dollar in the forefront; and the FED who apparently favors going into debt and doesn't appear to have any plans on lowering interest rates.

We're living in crazy times my friends . . .

[jimcasada]

Looks like the dollar is back on its downward trend......

[IRQVET]

10-Year Treasury Yield: Trading around 5.00%, holding near its highest level since 2007. No bueno.

Since treasury yields serve as the benchmark for global borrowing costs. When the 10-year yield rises, interest rates on mortgages, auto loans, and corporate debt climb right along with it. So the decision to raise interest rates this week are going to bring fuel to an already burning fire.

Restricting borrowing and lending, coupled by an interest rate hike- coupled with the current rate of inflation. . . weakening dollar; seems like we're heading off the cliff. We all remember what took place after 2007.

[jimcasada]

Actually, the dollar has been heading up this week, especially after the Fed announcement. $DXY is sitting at 100.4 right now.

[mjedlin66]

Bitcoin

[evilanne]

Glad to see the dollar isn't collapsing just yet.

Here are some ideas from German history: https://www.historydefined.net/german-hyperinflation/. I don't think it will get that bad but the last picture of suit made out of coins is pretty cool.

[Bubba]

Bitcoin

This is an interesting point. I had been playing with AI a week or 2 ago. I tried to find out what were the industries that did well during the Great Depression and which stocks held or even gained in that period. I got an interesting mix and some of the usuals (like XLP). Then I asked AI to convert those industries to today's industries so that we could see what would have happened today. Ironically, it spewed out Bitcoin too. Personally I'm more of an ETH guy only because of the utility of it and the fact that it's used in trillions of $ of transactions every year, but the concept is the same.

Will the Dollar collapse? In my view likely not. Will we have some sort of crisis a la 1970s, likely yes. Some dramatic decision will have to be made, like when they took us off the gold standard. Who knows, maybe they place us back on the gold standard? In any case, I doubt we'll get the German experience from before WWII. Sound economic policy wasn't known back then and they were in debt to a point of no return. We're not there...yet (in my opinion).

[ETOZZY]

Just a go figure. He He, it is always doing that to some degree in some form or fashion. The U.S. dollar has lost about 49% of its purchasing power since 2000. hmmm...

[Bubba]

Just a go figure. He He, it is always doing that to some degree in some form or fashion. The U.S. dollar has lost about 49% of its purchasing power since 2000. hmmm...

I'm not sure if you're referring to me or not. No matter, really. My point is that you should consider that we've had inflation since a long time and the last few years it's been worse than what we've had for a long time. That's been eating at the Dollar. Yet, it's been eating at almost every major currency too. Check out the global problem here:

https://www.cfr.org/articles/global-inflation-tracker

With the exception of Japan, most global (hard) currencies have been moving in lockstep in terms of inflationary pressures on their values. Either way, the Dollar will become worth less and less every year (with the exception of deflation...but that has its own risks) and it'll mean less and less as time goes on.