What Happens To Your Debt When The Dollar Collapses

Summary

In this video, Nolan Maias discusses the potential consequences of a currency collapse, particularly on debt. He explains that while hyperinflation might seem to ease debt repayment, it often leads to economic instability and job scarcity. Maias advises viewers on financial strategies to mitigate risk, such as maintaining low expenses, setting debt ceilings, and investing in tangible assets like real estate. He also suggests diversifying assets geographically to hedge against currency devaluation.

Takeaways

• 💵 **Currency Collapse Basics**: Currency collapse often happens with fixed exchange rates when investors lose confidence in a government's ability to maintain the currency's value.
• 🌐 **Global Impact**: While the US dollar is less likely to collapse due to mechanisms in place, other countries with fixed exchange rates are more susceptible.
• 📉 **Symptoms of Collapse**: Hyperinflation is a symptom of economic conditions, not the cause. The underlying issue is usually the country's inability to support its currency's fixed value or service its debt.
• 🏦 **Banks and Debt**: During a currency crisis, banks may call in short-term loans, making it difficult for borrowers to repay, highlighting the importance of having low debt and a stable income.
• 🏠 **Property as Stability**: Property tends to retain value better than other assets during a currency crisis, making it a relatively safe investment.
• 💳 **Credit Cards Risk**: High-interest credit card debt is risky and can become unmanageable during a currency collapse, emphasizing the need to avoid or pay off such debt.
• 📈 **Economic Growth**: A growing economy can service its debt, unlike one in crisis, which may lead to currency devaluation.
• 🌟 **Debt Repricing**: In a currency crisis, debt is often repriced to match the new economic reality, so it doesn't simply disappear with currency devaluation.
• 🔒 **Credit Reporting**: Modern credit reporting makes it difficult to escape debt obligations, even in a currency collapse, affecting one's ability to borrow in the future.
• 🌳 **Preparation Strategies**: Keeping a low baseline of expenses, setting a debt ceiling, and investing in assets that retain value are strategies to prepare for a potential currency collapse.

Q & A

What is a currency collapse?

A currency collapse is a situation where the value of a country's currency falls dramatically, often due to hyperinflation or a loss of confidence in the currency's stability.

Why is the US less likely to experience a currency collapse compared to other countries?

The US dollar is a floating currency, which means its value is determined by supply and demand. This allows it to fluctuate in response to economic conditions, reducing the risk of a fixed value becoming unsustainable.

What is the role of fixed currency exchange rates in currency collapses?

Fixed currency exchange rates can lead to currency collapses when a country's government pegs its currency to another currency or commodity at a certain value, and market sentiment shifts, causing investors to sell off the currency.

How does hyperinflation affect debt repayment?

Hyperinflation can make debt easier to repay in nominal terms because the currency's value decreases. However, it also leads to economic instability, making it harder to earn and keep money to repay debts.

Why might a mortgage be a safer form of debt during a currency collapse?

Mortgages are typically secured by real estate, which tends to retain value relative to other assets during economic crises. Additionally, the need for housing remains constant, supporting property values.

What is the impact of credit reporting on debt during a currency crisis?

Credit reporting can make it more difficult to obtain new loans if you default on debt during a currency crisis. This is because defaults are recorded and can affect your credit score for up to seven years.

How can setting a personal debt ceiling help in preparing for a currency collapse?

Setting a personal debt ceiling ensures that a fixed percentage of your income goes towards loan repayments, which can help minimize debt over time and reduce financial risk.

Why is it important to keep a low baseline of monthly expenses when preparing for economic instability?

Keeping a low baseline of monthly expenses ensures that you can maintain your lifestyle without increasing debt, providing financial stability and the ability to pay off debts faster.

What are some tangible assets that can help protect against currency fluctuations?

Tangible assets like real estate, cars (if debt-free), land, and gold can help protect against currency fluctuations because their value is less affected by changes in the currency's value.

How can diversifying assets geographically help protect against a currency collapse?

Diversifying assets geographically by owning assets in different countries can hedge against a currency collapse in your home country, as foreign assets may not be as affected by the same economic issues.

Why is it suggested not to put all money into gold as a protection against currency collapse?

While gold is often seen as a safe haven, it may not be the best investment if the currency does not collapse. Diversification is key, and relying solely on gold could limit potential gains in a stable economy.

Outlines

00:00

💵 Currency Collapse and Its Impact on Debt

The script discusses the hypothetical scenario of the US dollar collapsing and the effects it would have on debt. It explains that contrary to popular belief, a currency collapse does not necessarily wipe out debt. The video aims to educate viewers on how currency collapse occurs and the mechanisms that come into play. It also addresses the common misconception that hyperinflation would make paying off debt easier. The speaker, Nolan Maias, encourages viewers to like and subscribe for more financial insights.

05:00

📉 Causes of Currency Collapse and Debt Repercussions

This paragraph delves into the reasons behind currency collapses, such as an economy's inability to service its debt due to low growth and excessive spending. It contrasts fixed currency exchange rates, which are more prone to collapse, with floating currencies that adjust based on supply and demand. The paragraph also touches on how economic conditions, rather than just money printing, lead to currency devaluation. It discusses different types of debt and their vulnerabilities during a collapse, emphasizing the importance of understanding these dynamics to protect one's financial assets.

10:01

🏠 Preparing for a Currency Crisis with Property Ownership

The speaker suggests that owning property debt-free could be beneficial during a currency crisis. While hyperinflation might make debts easier to pay off due to an increased money supply, it also leads to economic instability, potentially making it harder to secure a job or maintain assets. The paragraph explains that debts do not simply disappear post-collapse; they are repriced according to new economic conditions. It also highlights the modern credit reporting system, which makes it difficult to escape debt obligations, unlike in the past.

15:02

💼 Strategies for Financial Protection During a Currency Crisis

Nolan Maias advises viewers on how to prepare for a potential currency crisis. He suggests keeping a low baseline by not increasing monthly expenses in line with income and setting a personal debt ceiling. He also recommends consistently reducing debt and investing in assets that retain value, such as real estate, which tends to fare better than other assets during economic crises. Diversifying assets geographically is also proposed as a strategy to hedge against currency collapse.

20:04

🌐 Global Implications of a US Currency Collapse

In the final paragraph, the script addresses the global impact of a US currency collapse, noting that while the debt figures are concerning, the US economy remains robust and growing. It points out that other countries have a vested interest in the US economy's stability due to trade relationships and holdings of US dollars in their foreign exchange reserves. The paragraph concludes by emphasizing that a currency collapse is unlikely for the US, and viewers are directed to another video for a deeper understanding of US debt and its service costs.

Keywords

💡Currency Collapse

Currency collapse refers to a rapid decrease in the value of a nation's currency, often due to hyperinflation or a loss of confidence in the currency. In the video, this concept is central to the discussion on how a collapse of the US dollar would impact debt and financial stability. The script mentions historical examples of currency collapses, such as in Germany in the 1920s and more recently in Venezuela, where fixed exchange rates and economic mismanagement led to severe devaluation.

💡Hyperinflation

Hyperinflation is an extreme rate of inflation, where the general price level of goods and services in an economy increases rapidly and unpredictably. The video discusses how hyperinflation can lead to a currency collapse, using it as a backdrop to explore the potential ease of paying off debt when the currency's value plummets. However, it also cautions that hyperinflation can make it difficult to secure necessities due to the instability it causes in the economy.

💡Debt

Debt is an obligation or liability that arises from borrowing money. In the video, the concept of debt is explored in the context of currency collapse, with the host discussing how different types of debt (credit cards, short-term notes, car loans, mortgages) might be affected. The video suggests that while it might seem that a devalued currency would ease debt repayment, the economic instability caused by such a collapse could make it harder to service debts.

💡Fixed Exchange Rate

A fixed exchange rate is a type of exchange rate regime where a currency's value is fixed against either that of another single currency or to a basket of other currencies. The video explains that countries with fixed exchange rates are more susceptible to currency collapses because their currencies do not fluctuate with market conditions, leading to a mismatch between the government's stated value and the market's perception.

💡Floating Currency

A floating currency is one that is not fixed to the value of another currency or to a basket of currencies but is allowed to fluctuate based on market forces. The video contrasts floating currencies with fixed ones, explaining that floating currencies are less likely to experience a collapse because their values adjust in real-time to market sentiments and economic indicators.

💡Interest Rates

Interest rates are the cost of borrowing money and the return on investment. The video mentions how changes in interest rates can affect a currency's value, with higher interest rates typically strengthening a currency's value because they attract investment. Conversely, lowering interest rates can lead to a decrease in a currency's value, as seen in the case of Canada mentioned in the script.

💡Debt Repricing

Debt repricing is the process of adjusting the terms or value of existing debt in response to changes in economic conditions or currency values. The video discusses how, in the event of a currency collapse, debt may be repriced to reflect the new economic reality, meaning that the debt burden on individuals might not be alleviated despite the currency's devaluation.

💡Credit Bureaus

Credit bureaus are agencies that collect and maintain records of an individual's or business's credit history. In the video, the role of credit bureaus is highlighted in the context of a currency collapse, explaining that defaults on debt are reported and can have long-lasting effects on an individual's creditworthiness, making it difficult to obtain loans in the future.

💡Tangible Assets

Tangible assets are physical items of value, such as real estate, cars, and precious metals. The video suggests that owning tangible assets, especially those free of debt, can provide a buffer against currency fluctuations and economic instability. It contrasts these with more volatile financial assets, like stocks, which may lose value during a crisis.

💡Diversification

Diversification is the process of spreading investments across various financial instruments, industries, and other categories to reduce risk. The video recommends geographical diversification of assets as a strategy to hedge against currency collapse, suggesting that owning assets denominated in foreign currencies or located in other countries can protect against the risk of a domestic currency devaluation.

Highlights

Currency collapse can make paying off debt easier due to hyperinflation, but it doesn't necessarily wipe out debt.

Fixed currency exchange or peg to another currency is a common cause of currency collapse.

Floating currencies are less likely to collapse because they fluctuate with supply and demand.

Investor sentiment plays a crucial role in currency value, and a shift can lead to a collapse.

Economic conditions, not just money printing, often lead to currency devaluation.

The US dollar is less likely to collapse due to economic mechanisms in place.

Different types of debt react differently to a currency collapse.

Credit cards are high-risk debt and problematic during a currency collapse.

Short-term notes and lines of credit are likely to be called by banks during a crisis.

Mortgages are relatively stable assets during a currency crisis.

Hyperinflation can make debts easier to pay but also increases the cost of living.

Debt does not disappear in a currency crisis; it gets repriced or replaced.

Governments protect creditors, so debt is unlikely to be forgiven in a collapse.

Modern credit reporting makes it harder to escape debt after a collapse.

To prepare for a currency crisis, keep your baseline expenses low and debt ceiling manageable.

Owning tangible assets without debt can protect you from currency fluctuations.

Diversifying assets geographically can hedge against currency collapse.

The US dollar is unlikely to collapse due to the size and growth of the US economy.

Transcripts

what would happen to your debt if the

dollar collapsed I mean if the currency

that you borrowed a bunch of money in

was no longer worth what it once was and

there was an abundance of it available

thanks to hyperinflation wouldn't that

make paying off your debt substantially

easier and if the currency got replaced

completely wouldn't that wipe out your

debt well not exactly and in this video

I'm going to discuss currency collapse

what you need to understand about how it

happens and the mechanisms in place then

I'm going to discuss what would happen

to your debt if the US dollar did in

fact collapse and then I'm going to talk

about how to prepare yourself and

protect your money so that in the event

that the inevitable or maybe the not so

inevitable actually happened you would

be prepared and not find yourself in

financial R but before I get into all

the details my name is Nolan maias and

if you want to thrive financially this

is the place for you so do me a favor if

at the end of this video you found it

interesting or you found it informative

hit the like And subscribe button so

more people like you can see this video

as well if really helps for the YouTube

algorithm okay so let's get into it

let's discuss currency collapse and how

it would affect you and specifically I'm

going to talk about your debt your

assets and how to protect yourself in

case this crazy scenario that is

seemingly more talked about and more

popular to talk about than ever actually

occurred in order to understand what

would happen to your debt and the value

of your assets first we need to start by

understanding currency collapse and the

basics of why this happens now as much

as many people would like to have you

believe that the US is at serious risk

of a currency collapse because of all

the money Printing and all the other

stuff that by the way happened in pretty

much every other country around the

world and in pretty much relative terms

to the US the reality is is that there's

some mechanisms involved with currency

collaps that make it a little less

likely for the US to find themselves in

a similar situation but also make it

highly likely that there are going to be

other countries that do find themselves

with a currency that is devaluing at a

very sign ific Pace a lot of the

currency collapse that's happened over

the last century is largely due to

something called fixed currency exchange

or Peg dollars in fact pretty much every

country over the last 100 years going

back to Germany in 1920 whatever it was

well pretty much all of them had a

pegged or fixed currency either a

currency that was pegged to another

currency or was pegged to something like

gold or silver or petroleum for example

and floating currencies rarely

experience the same sort of issues the

reason for this is because a currency

like the Canadian dollar or the US

dollar or the British pound or the

Japanese Yen I think it's called I

always get the Yen and the WAN confused

the one by the way is very much a fixed

currency although it is revalued on a

daily basis but pretty much any floating

currencies have one thing in common and

that is that the values of those

currencies fluctuate with supply and

demand so if there's something happening

in a country that makes investors scared

to be there well the market prices in

those potential issues and that's why

you see different different currencies

fluctuate relative to other currencies

on pretty much a minute-to-minute basis

it is because the real-time issues that

are happening in those countries are

being priced into the values of the

currency that's also why you see that

when a country increases interest rates

typically the value of their currency

goes up because it becomes a place where

people want to invest their money in

exchange for higher return and in the

same way if you see interest rates going

down relative to other countries like

what could happen in Canada in the next

little while well then the currencies

come down in value and that is because

there are less investors that want to

invest in a place where they can get

lower returns it's really a simple

mechanism that controls the values of

those currencies but the problem becomes

when a government or a central bank pegs

their currency or fixes it and says it

is worth this much until we tell you it

is worth something different and the

problems happen in countries that have

fixed exchange rates when the sentiment

in that market shifts so in other words

when investors no longer believe that

the value of the currency is what the

government is telling everybody that it

should be and this is very much what

happened in Germany Venezuela Brazil

Mexico and pretty much every major

currency devaluation in the last 100

years essentially the government had a

currency that they said was worth X and

investors said it seems like it's worth

significantly less than that so we are

going to get the heck out of Dodge sell

all of this currency and that is when

major problems start to happen and not

only that in the same vein citizens of

the very country that the currency is in

also start to sell goods and try to

exchange their currency in the country

that they live in which they start to

believe is not worth anything in

exchange for foreign currencies in order

to protect themselves in fact if you

look at Venezuela almost half of all

trade in Venezuela is now done in US

dollars as much as Venezuela absolutely

hates the fact that the US even exists

at least of course from an economic

standpoint now there's a bunch of things

that can lead up to these massive

devaluations the first is when it

becomes clear that an economy is not

going to be able to pay its debt this

often comes when there is low growth

lots of spending and a tax base that

just cannot afford to be able to pay the

debt that they owe to other countries

now of course there's always lots of

talk about the US debt and how it's so

high and the debt GDP ratio is high but

the reality is is the cost of servicing

that debt is still very much in line

with what the US can afford based

primarily on GDP and the amount of money

that the economy is essentially creating

so if the economy is growing and it's

growing at a rate that is faster than

the cost of servicing the debt well

everything is pretty much fine and by

the way at the end of this video I'll

link to another video that explains the

difference between the debt to GDP ratio

which is the alarming number that you

see in the news every single day and the

actual cost of service of the debt which

historically is actually not as high as

one might think it is and this is

largely due to lower interest rates now

when it comes to these currency

collapses the actual printing of money

and the excess amount of money that is

being pumped into the system is usually

not the actual disease the disease is

very much the economic conditions that

the country is facing so the

hyperinflation or the devaluation of the

currency is the symptom but there's

usually something else going on in the

country that no longer allows them to be

able to a support the fixed value of

their currency and B actually be able to

earn enough income in order to be able

to support the debts now of course the

devaluation of the currency can be

offset by increasing interest rates the

problem with that though is when you

already have an economic catastrophe

that is leading to hyperinflation and

having to print money if you start to

increase interest rates without solving

the original problem first well that

makes pretty much everything less

affordable while at the same time you

have the inflation and still have all

the underlying problems which basically

leads to more hyperinflation because

eventually you have to either print more

money or you have to lower interest

rates both of which are of course

inflationary so it becomes this endless

loop that is caused by the economic

conditions that have led to it and when

you see investors and citizens basically

flocking away from the currency of a

country it is most often very directly a

government related issue it is a lack of

confidence in the current Administration

to be able to provide the Necessities

which is for the most part economic

growth grow that is required to support

the currency and to support the citizens

so pretty much everyone gets out of

Dodge and all of a sudden you have a

currency that's collapsing so then the

question becomes what happens to debt

well first we need to understand the

different types of debt of course there

is the basics there is the credit cards

there is the short-term notes which is

things like lines of credit and other

short-term notes that are expected to be

paid back pretty much when they are

called by the bank then there are the

car loans and the mortgages now

obviously credit cards are problematic

because of they're extremely High

interest rate and these are just things

that nobody should have at any given

time and somebody who has them even

during a currency collapse is very much

leaving themselves exposed to a

situation where they will not be able to

pay their bills and when hyperinflation

happens or the value of the dollar goes

down or whatever currency it is well

that leads to not having enough money to

a be able to pay the credit cards but

also the credit cards are typically a

symptom of overc consumption and if

you're overc consuming and the value of

the dollar goes down well that leads to

just more overc consumption and it's

just very much a signal of bad habits

that are not going to get any better

when hyperinflation rolls around then

there's short-term notes and these are

the types of credit facilities the types

of loans that are probably going to be

called first by the Banks anybody who

has borrowed off a line of credit or is

any sort of borrowing that's been done

on a short term is probably going to be

asked to give the money back because the

expectation is that if they bored it on

a short-term basis that they're probably

going to have the money available to pay

back those loans quite quickly so those

become the low hanging fruit of course

in a hyperinflation scenario if you've

got debt that's called and you can't

find the money in order to pay back that

debt well that becomes problematic and

of course you've got car loans which

it's my belief are the number one wealth

killer in the world and these are the

types of loans that are still secured

against something but that doesn't

necessarily mean that they are the best

type of loan to have either now the last

one which is mortgages this is the type

of loan that you have in order to

obviously own a home and this is the one

asset that pretty much regardless of

what's happening with the currency is

probably going to remain relatively

stable relative to all of the other

assets now of course when you have a

currency crisis you're going to see a

certain amount of people trying to leave

the country but for the most part a

large majority will stay in the country

which means they all need a place to

live which means that property relative

to most other assets is probably going

to do very well now that doesn't mean it

won't go down of value it'll just do

well relative to everything else so if

you can own property or own multiple

property and own it debt-free well

you're going to be the type of person

who has the least pain when there is a

currency crisis now one might believe

that during a currency crisis when

there's hyperinflation there's going to

be so many more dollars available

relative to the amount that are

outstanding on your loans and that this

should make it pretty easy to wipe out

any debt that you have and this is

partially true yes hyperinflation can

make your debts easier to pay if you can

in fact get enough currency to pay off

those debts while also trying to pay for

all the other necessities that are going

up significantly in value as you were

trying to buy them and that

hyperinflation is very much an indicator

that there is a significant amount of

economic instability which means it

could be harder to get a job it could be

harder to keep a job and it could be

harder to actually maintain assets that

are going to grow in value with the

amount of debt that you have or I guess

not really with the amount of debt that

you have but with the amount that prices

are going up because when things are

getting more and more expensive on a

day-to-day basis and the amount of

dollars available aren't keeping up to

that well that makes it very hard to

find the funds to be able to pay for the

Necessities let alone pay for all the

debt obligations that you have and I

cannot emphasize enough that one of the

biggest problems in a currency crisis is

that there aren't enough jobs to allow

people to make the money that they need

in order to have the Necessities LED

alone pay the debt but that doesn't

necessarily mean that you're going to

get off got free just because the value

of the debt is going down and because

you don't have a job to pay for it

because in the past you may have been

able to default on loan and only the

bank that lent it to you would know but

in the modern era of credit bureaus that

isn't the case and I'll get to that in a

second so what inevitably happens in a

currency crisis is that eventually the

debt either gets completely repriced or

it gets replaced and what happens with

debt is that inevitably that debt get

gets repriced as well either in whatever

currency replaces the original one or

whatever ratio that is deemed to be the

correct ratio when there's a revaluation

that takes place so what that means is

that just because you have a debt that

is so much smaller in valuation relative

to where the value of the currency went

when the debt actually gets repriced

you're pretty much going to have your

debt completely repriced in line with

that so that your obligation to the bank

is essentially going to be the equiv of

what it was before and even though your

contract for your debt would have been

in one currency at one valuation the

types of revaluation that happens has

nothing to do with your contract with

the bank it has everything to do with

the government and when the government

mandates that there's an adjustment in

the currency that applies to everything

including your debt regardless of what

the contract stated so if your contract

is in US dollars but the US dollar is

replaced by something completely

different well you're pretty much

screwed because your debt is going to be

repriced into whatever the new currency

is anyways so your debt doesn't

disappear and in fact because of how

much harder it is to make money and keep

money during an economic crisis well

your debt could actually be more

burdensome than it was before because

governments always protect creditors

they have to if they don't they lose the

very mechanism that allows the money

supply to actually work and actually be

traded so when it comes to debt there's

very rarely a debt Jubilee once you have

the debt expect that you're going to

have to pay it off regardless of if the

currency that you borrowed it in is

different than the one that exists when

the currency collapses but that's not

even the bigger problem because that's a

problem for the economy as a whole but

as an individual there's one thing in

the modern economy that we haven't had

in the past when there's been currency

collapses and that is modern-day credit

reporting which keeps track of who pays

their bills and who doesn't pay their

bills like I said before it used to be

that if you borrowed from a bank and you

didn't pay them back you could go and

build a relationship with another bank

and then you could get loans again but

now in the modern day if you default on

a loan that's going to be reported on

your credit bureau which means not only

is it going to be really tough right now

but for the next 7 years at minimum you

aren't going to be able to borrow any

money if ever at all so in the past

where a currency crisis would mean

defaults on debt and then you wouldn't

have any issues because eventually when

things were covered you could go and buy

new money to buy another home or

whatever in the modern world the people

who pay their bills will be the people

who can borrow money and the people who

don't pay their bills will be pretty

much out of luck even though there was

an economic circumstance that warranted

the not paying of the bills the fact

that you had taken on too much debt

obligation where others had been able to

pay makes you less worthy of being able

to get a loan which makes life a lot

more difficult so the question is how do

you prepare well the preparation for a

currency crisis is the exact same

preparation that well you should pretty

much be doing regardless and the first

thing is to keep your Baseline low and

what I mean by that is most people as

their incomes go up and as their

Investments increase in value they start

to increase their run rate so they start

to spend more money in line with the new

money that they have but the trick to

being financially free is to keep your

Baseline low so in other words your

monthly expenses on any given month

shouldn't be increasing regardless of if

you have more money in your Investments

or making more money if you can find a

living situation that is perfect for you

doesn't have to be extravagant but

doesn't make it so that you aren't

laying out more and more money as you

earn more and more money well that will

give you the freedom and the tools that

you need in order to be financially

independent and most importantly that

will also allow you to pay down your

debt faster because buying one home and

paying it off as your income increases

is a significantly better path to wealth

than buying one home and then when your

income increases buying a nicer home

that you probably don't really need and

is just bigger and harder to clean now

in addition to keeping your Baseline low

it also makes a ton of sense to set a

personal debt ceiling so for me I like

to keep this at no more than 25% of my

income going towards any sort of loan

obligations whatsoever I know that if it

never increases past 25% I'm pretty much

good and I set this debt ceiling based

on my income at the time I set it it's a

debt ceiling for a reason you don't

increase the debt ceiling as you make

more income you leave it constant over

time and then if you make enough money

to have a couple extra 100 Grand that

you can buy a new property with while

maintaining no greater amount of debt

awesome but you want to do everything

that you can to over time make sure your

debt is minimized and if you just keep

your debt cealing at the level that it's

at today in 20 years if you have no more

additional debt well your debt relative

to what it was 20 years ago is actually

going to be significantly less and is

significantly more manageable which if

the currency ever actually collapses

means that you're in a position to

actually be able to pay it off and get

rid of it should the writing on the wall

suggests that you need to take

protective action then in addition to

that if I don't need to keep the debt at

that debt ceiling I want to consistently

try to reduce that debt over time and

get it to zero as fast as I possibly can

because here's the thing that people

don't understand about debt is debt

equals risk having debt allows people

companies governments to come and take

your stuff when you don't repay loans

and if you don't have a loan well it

makes it pretty hard for them to be able

to take your things so getting rid of

debt reduces your risk to zero and zero

risk means that no matter what happens

in the economy you are protected then in

addition to that you want to be buying

assets that retain value relative to

other things when there is an economic

crisis so even though the values of real

real estate went down for example in

2008 relative to pretty much everything

else they actually maintain their value

pretty well especially when you look at

the values of stocks so if you buy

assets that relative to everything else

are going to maintain value so these are

hard tangible goods that nobody can take

away from you well that protects you

from currency fluctuations because even

if the currency fluctuates up down all

around it doesn't matter because a house

is still valued at the value of a house

relative to everything else like a car

and so on and so forth so even if the

currency fluctuates owning things that

are going to maintain their value

relative to foreign currencies is a

really good idea and then last but not

least if you are really concerned about

a currency

devaluation one of the best things you

can do is diversify your assets

geographically so in other words buy

assets from other nations so the reality

is in a currency crisis it's not about

whether or not your debt is going to get

canceled because it's not it's all about

what what you own and how much you owe

and the less you owe the less risk that

you have so owning things like real

estate cars that don't have debt land

and gold although don't put all of your

money in Gold because if the currency

doesn't collapse that might not be the

best investment there's other videos on

this channel about that but having those

tangible assets that you don't owe any

money on that nobody can take from you

are what helps people in an economic

crisis survive it's all about owning

tangible assets not having any debt yet

and then on top of that if you are

genuinely worried about the dollar

collapsing well then it makes sense to

start buying at least some foreign

assets not all foreign assets I'm

talking about 10 15 20% of your

portfolio being in foreign assets that

are denominated in foreign currency this

might mean buying stocks on foreign

exchanges it might mean buying Bonds on

foreign exchanges and it might mean

owning land in foreign countries as well

because if you own assets that are

outside of your current currency that is

a way to hedge yourself against your

currency actually collapsing but at the

end of the day here the reality is is

that the US still has one of the biggest

economies and even though those debt

numbers are scary and the debt to GDP

numbers are scary the US economy is

still the biggest economy in the world

and it is still an economy that is

growing and the growth supports the debt

which means that the fear of a currency

collapse although not impossible is

still unlikely and keep in mind as well

well that all the other countries

including the brics Nations have vested

interest in seeing the number one

trading partner in the world for pretty

much all of those countries not have

their currency collapse because they do

carry a significant amount of US dollars

in their foreign exchange reserves which

means if the US economy collapsed and

the US dollar collapsed well they're in

just as much trouble as the US itself oh

and if you want to see more on the US

debt and the US debt ceiling and why the

actual cost to service the debt aren't

as scary as you might think make sure

you check out this video right here