The Future of MONEY - Is the Dollar, Rand, and Euro coming to an end?

Ajouté : 2026-05-31

[00:00:00]Hi, and welcome to the Money Moves studio. Today, we're chatting about the future of money. So, we attended the Woordfees last year, and we actually presented a talk about this very same topic. The attendees loved it, we loved it, and Paul even got a whole full page in the Burger Sake Afdeling. How does that feel, Paul? It was Yeah, it was quite surreal, Ingrid. I didn't expect it. Um Mama was trots.

[00:00:27]>> [gasps] >> So, we've been hearing things like de dollar la de dollar la de dollar >> [laughter] >> Brah. Hearing things like de-dollarization, um BRICS forming a new currency, the price of gold skyrocketing, and crypto being offered as a possible new form of currency. This all seems to kind of sound an alarm. Is that true? Our money is in big trouble. You're right. And in this video, I will provide some context as to how we got here, and how does the future potentially look. So, let's dive in. So, our story today starts with the US government. Uh the government is a business. It's a very big business, but it's a business nonetheless. And each business has incomes and expenses. And hopefully, the incomes are more than the expenses, so you make a profit. If you don't, you make a loss. Like all governments, the US makes money via taxes. So, personal income tax, uh VAT, company tax. So, this is the money that comes in, and then the money that goes out is basically uh uh uh hospitals, school care, infrastructure, social grants, and so forth. So, how are they performing as a business?

[00:01:37]Here's the the real oopsie. This company has not made a profit in 25 years.

[00:01:46]The last time the government as a business made profit was in the year 2001.

[00:01:53]That is very scary. So, just to give you an idea, in 2024 and 2025, they made via taxes about 5 trillion dollars, but they spent about 7 trillion dollars. That's a deficit of 2 trillion dollars or about 40% they spend 40% more than they get in.

[00:02:15]What?

[00:02:17]Imagine you're a business, you have a hair salon or a car dealership or a school and you spend 40% more than you make every year for 25 years. How is that possible? It is not possible. How are the lights still on?

[00:02:31]Okay, so knowing that they've got a 40% deficit, how do they actually cover the shortfall? Yes, Ingrid, so they're still spending the money. So, uh where does the money come from? Uh so, they are actually borrowing the money.

[00:02:45]Where do they borrow from? And I think for most viewers the answer will surprise you.

[00:02:50]They are borrowing this from you. You, us, the people in the economy and they do it via government bonds. What is a government bond? Well, um if you go to the bank and you need money, you then you take out a bond, right? And the bank gives you money for your house or your car. But, you can also be the bank in the scenario where you give the money and then the government pays you interest on that. That's called a government bond. And most of us are uh invested in balanced funds, you know, like the Allan Gray Balanced Fund or the Coronation Balanced Fund. And a balanced fund is basically 75% stocks and 25% bonds. Probably 90% of the viewers are if you whether you know it or not, you are invested in government bonds. You are currently lending the government money. So, just to get this so that we're on the same page, yeah. The government is spending more than it's generating and it's borrowing money from people to cover the shortfall.

[00:03:50]The government's also paying interest on the money that it's borrowing, so it's a win-win for the lenders and the borrowers. Where's the red flag in this, Paul?

[00:04:00]Well, it sounds like a great deal, right? Because even at our in-house funds, we invest in South African government bonds because they need money, we want to make money, 10% interest, everyone wins. So, what what is the problem? Well, the problem is if you're the government the government borrows money, and the money that they borrow is not free. They need to pay interest. And if they borrow too much money for too long of a time, that interest becomes a real head-scratcher and a really big problem for them. So, let me just give you a number here. At the moment, the US government is $38 trillion in debt. They owe the people, mostly the people.

[00:04:42]They spend about $3 billion a day just covering the interest.

[00:04:46]Now, I know that's just numbers, but in percentage terms, it's about 15% 1 5 of the budget. So, $15 out of every $100 that the US government spends in the economy goes purely to interest. And I just want to put this here. They're not repaying the debt, right? This is not like repaying the debt. This is just covering the interest on the debt that we have. That's a problem, and it's only getting worse.

[00:05:12]What about South Africa? Well, South Africa is worse.

[00:05:15]Japan, worse. China, much worse. Much worse. Let me just give you, Ingrid, let me show you the government budget of South Africa. And I think this is going to break your brain. So, this is what our government spends money on in billions. So, basic education, for example, 346 billion. Then you get arts and culture, health, economic development, police and defense. And I want you to look at the very last line item on the budget. And it says debt service cost. That is interest, not repaying the debt, just the interest.

[00:05:48]And if you compare that number with the rest of the line items, what stands out here?

[00:05:54]That is the biggest.

[00:05:56]Our government is paying more in interest on the loan than they are spending on schools, health care, social grants.

[00:06:07]Did you know this? This is a problem.

[00:06:09]This is a big, big problem. It kind of does make me feel a tiny bit better that this is not just a South Africa problem and that you've listed so many other countries that are also struggling with this problem, but nevertheless. So, let's just recap. Government spending more than it than it generates, but it is borrowing other money to cover the interest on the borrowed money already.

[00:06:32]So, they're just borrowing to borrow again. So, this is actually just a spiral and it's making the amount of money that we have in the system lose its value. Am I correct in saying that?

[00:06:46]Exactly. So, this is not only theory, Ingrid. Unfortunately, we've seen this many times in the past. If you just have to make more and more and more money to pay the previous money, there's so much money in the system that the money completely loses its value.

[00:07:03]>> [music] >> Like for example, a bread will cost you 5 rand, next month is 10 rand, then there's more money. So, now it's the same amount of bread, but there's way more money in the system. So, now all of a sudden, you have to pay 20 rand, 30 rand, 50 rand, 100 rand for the same bread because the products and services are the same, but the money is doubling, tripling, quadrupling.

[00:07:24]Have we seen this before? Yes. We are neighbors with Zimbabwe. You have to pay a gazillion Zimbabwean dollar to buy a loaf of bread. That doesn't make sense at all. There's Venezuela, there's Turkey, there's Argentina. It's happened many times in the past and many countries in the world today in 2026 are heading in that direction. It's It is possible to turn it around, but it's almost It is basically too late. So, this is why people are actually looking at investing in alternative things like crypto or in using their money to invest gold, silver, you name it because they're actually in a in a very fearful state. Exactly, Ingrid. And viewer, I want you just to imagine the scenario.

[00:08:11]If the dollar, the rand, the euro, if it comes to an end in 10, 15, 20 years, you still have to pay for goods and services with something. If it's not the rand or the dollar or the euro, what's it going to be?

[00:08:28]Viewers, if you want to chat to us about how to navigate these uncertain times, please reach out. We'd love to chat.

[00:08:36]See you next time.