The U.S. Balance Sheet: The Dollar Has Nothing to Do with U.S. Stocks

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00377B The U.S. Balance Sheet: The Dollar Has Nothing to Do with U.S. Stocks. Investing in U.S. indexes means holding U.S. assets, not U.S. currency. February 10, 2025, CLEC Investment and Financial Management Channel. Ray Dalio and many other market celebrities are wrong when they say the United States will go bankrupt because of its huge debt. Do not assume that famous people are always right. You must think with your own head. Without thinking, a person is only walking flesh. Thinking is what gives people value.

We do not hold U.S. dollars. Whether the U.S. dollar has value or not, the rise or fall of the U.S. dollar is none of our business!

No country in the world goes bankrupt in the ordinary sense. This is common sense. As long as a country has land and people, it will not go bankrupt. At most, it cannot repay debt temporarily, meaning a temporary liquidity problem, and it repays after output resumes.

We do not hold U.S. dollars. Whether the U.S. dollar has value or not, the rise or fall of the U.S. dollar is none of our business!

It would be best if the U.S. dollar is worthless and I owe myself a bunch of U.S. dollars. I would be happiest if the U.S. dollars become garbage.

If the U.S. dollar becomes less valuable, then assets priced in U.S. dollars can rise dramatically. Otherwise, why would I exchange valuable assets for worthless dollars?

U.S. stocks are assets, just like your house is an asset. Does the U.S. dollar have value? Your house is still a habitable house, and your iPhone can still make calls.

Assets can be priced in U.S. dollars, Euros, gold, ancient shells, or labor services. As long as they create value for you, you are willing to trade.

The U.S. dollar is not valuable, so assets denominated in U.S. dollars can rise to the sky. Otherwise, why would I exchange assets for worthless U.S. dollars? US dollars

So, why do I always recommend that everyone borrow as much money as they can afford? Now we are borrowing garbage to spend and exchanging garbage for capital.

When it's worthless, you have to have a lot of worthless dollars before you're willing to sell your valuable assets, right?

If USD is garbage, why should I trade in USD? Give me something else of value to buy my assets. Otherwise, I will not sell. The U.S. dollar may become worthless, but our index funds and real estate are still useful and valuable.

So, why do I always recommend that everyone borrow as much money as they can afford? Now we are borrowing garbage to spend and exchanging garbage for capital.

In the future, you only need to use the "garbage" currency to repay the loan while keeping the more valuable assets.

U.S. stocks have nothing to do with the U.S. dollar! The U.S. dollar is like RMB and Euro. How many Euros, RMB, and U.S. dollars you want to sell your assets for is determined by the seller.

How much an Apple phone costs in U.S. dollars, RMB, and Euros depends on the currency value. Apple decides. Or if you help clean the house and take care of food and drink for a few days, or wash dishes in a restaurant for a few days, you can exchange it for an iPhone one.

Just look at the value of the U.S. dollar and decide how many dollars you need to exchange it for a mobile phone. The same goes for the stock price.

How much is the value of an Apple phone in exchange for how many dollars? It’s a comparison between the value of an Apple phone and the value of the U.S. dollar. But it’s not just dollars that can be exchanged for mobile phones. If you have other valuable items, you can exchange them for mobile phones.

Depending on how much the US dollar is worth, you will decide how many US dollars you need to exchange for a mobile phone. The same goes for the stock price.

If the US dollar is really worthless, we will switch to other currencies or other asset transactions. No US dollars are accepted.

U.S. Balance Sheet January 6, 2025

But Americans must pay taxes in U.S. dollars, which creates demand. The U.S. dollar still has basic support. Stop badmouthing the United States.

The U.S. dollar is worthless. Apple mobile phones are expensive when priced in U.S. dollars. You have to use more U.S. dollars to buy Apple mobile phones. The same goes for Apple stocks. The U.S. dollar is worthless. You need more U.S. dollars to buy Apple stocks. When stocks are priced in U.S. dollars, they will rise sharply.

This is inflation.

U.S. Balance Sheet January 6, 2025

Total U.S. assets: 202T U.S. government debt deficit: 36T

As long as the U.S. dollar is part of the U.S. debt (including the government and the private sector, that is, the U.S. dollar currency is created by borrowing between the U.S. government and the private sector. The U.S. dollar is a spot bond, that is, the U.S. dollar provides goods or services, the creditor's rights are transferred, and it does not matter who the debtor is (of course, the ultimate debtor is the entire American people, not the U.S. government.) It's that simple.

Total U.S. assets: 202T U.S. government debt deficit: 36T

The total debt of the U.S. government deficit plus the people's debt: 101T (this is equivalent to the dollar issuance) GDP: 28.57T U.S. federal tax revenue 12T per year If the average tax rate is 15% (of course a bit underestimated.), the national income is 80T (of course also an underestimate.) So the simplified version of the balance sheet of the United States

Total assets in the United States: 202T

The balance sheet of the United States: It can be thought of as the country of the United States, and it can be compared to a person's balance sheet.

There is a house worth 2.02 million.

Loan debt owed: 1.01 million equals dollar issuance.

Annual income: 800,000.

Such a balance sheet is better than the average person. Most people don't worry about their own balance sheet. They worry that the United States is too far away. Worry about yourself.