It’s no secret the United States has been at odds with both China and Russia lately.
So what? What does it mean to Main Street entrepreneurs and investors?
Maybe nothing. Or maybe a lot more than you think.
Just a few months ago, Russia dumped a majority of the Treasury holdings.
Three out of the last four months, China has reduced its Treasury holdings.
And now Market Watch reports … 10-year Treasury yield hits 4-month high as bond market sells off …
“ … investors fear China … could sell its Treasury holdings to push the U.S.’s borrowings costs higher.”
Not TWO days later, Market Watch reports … Mortgage rates jump to four-month high as housing hits a bump.
That’s because, as any credible mortgage professional will tell you, mortgage rates track VERY tightly with 10-year Treasury yields.
So you don’t need to be Sherlock Holmes to see …
… there’s a direct connection between what Russia and China are doing and YOUR Main Street real estate investing.
But it’s bigger than interest rates. Interest rates are more a reflection of currency and bond markets.
The United States has enjoyed … and some might say abused … a privileged status because of the U.S. dollar’s status as the world’s reserve currency.
China and Russia have both publicly proclaimed their upset over how the U.S. the dollar system … and they’re working to dethrone it.
Some people who are well-qualified to have opinions think …
… there’s a HUGE danger to dollar-denominated investors if the dollar LOSES reserve status.
According to Bloomberg, famed billionaire hedge fund manager Ray Dalio spells out America’s worst nightmare … warning the U.S. “not to take its reserve currency for granted.”
“The idea that the U.S. dollar would lose its status as the world’s reserve currency is an existential threat unlike just about any other to the U.S. government and financial markets as a whole.”
“ … for just about everyone’s sake, we should hope that he’s wrong.”
Last time we looked, hope is not a strategy.
We don’t make this stuff up. We pull it right from the headlines. In fact, we’ve been covering it closely for more than five years.
The good news is these things move S-L-O-W-L-Y. The bad news is these things move S-L-O-W-L-Y. It’s easy to fall asleep at the wheel.
It’s also easy to ignore or dismiss the people who keep sounding the alarm.
But if you earn dollars, borrow dollars, measure asset values in dollars, or use credit markets in any way … the future of the dollar impacts YOU.
Most Main Street investors aren’t paying any attention at all …
They don’t study history. They don’t recognize the warning signs … even though there are clues in the news every day.
They won’t see a dollar crisis coming and won’t know what to do if it happens. It will strike them like a thief in the night.
But it doesn’t have to happen. In fact, the more people who are aware and prepared, the less likely it will happen. And the less severe it will be if it does.
Of course, warnings are only useful if understood and heeded.
Think about how hard you work and study to create profits in your business and investing.
How much time do you invest in studying how to avoid LOSING it all?
If you’re like most investors, it’s not very much.
Riding an uptrend is an easy way to FEEL like a genius … but TRUE investing genius is revealed in the BAD times.
Warren Buffet’s famous quote sums it up …
“Rule #1: Don’t lose money. Rule #2: Remember rule #1.”
Okay, so you’ve read this far. Now what?
Well, you probably know we can’t possibly give you a useful answer in just a few hundred words.
If you REALLY want to know, you’ll need to dig in … and invest some time and money in getting up to speed.
It starts with getting your mind around the situation.
If guys like Ray Dalio are paying attention to the future of the dollar … maybe YOU should too.
When it comes to China and Russia’s attack in the dollar, we created a VERY affordable 48-minute video and two downloadable PDFs which many people have found helpful …
The video features the opening presentation from our 2018 Investor Summit at Sea™ … which kicked off with two full days focused on the Future of Money and Wealth.
Not only has nothing changed since the original presentation, but the news continues to indicate things are picking up speed.
So it’s not surprising savvy investors like Ray Dalio are concerned and making contingency plans.
Perhaps you should too. After all, better to be prepared and not have a dollar crisis than to have a dollar crisis and not be prepared.
Until next time … good investing!
More From The Real Estate Guys™…
- Check out all the great free info in our Special Reports library.
- Don’t miss an episode of The Real Estate Guys™ radio show. Subscribe on iTunes or Android or YouTube!
- Stay connected with The Real Estate Guys™ on Facebook, and our Feedback page.
The Real Estate Guys™ radio show and podcast provides real estate investing news, education, training, and resources to help real estate investors succeed.