What will happen if...

The US dollar has already lost its status as the Petro dollar.
It is in the process of losing its status as the worlds reserve currency.
(BRICS planned new gold backed currency and USA's own domestic issues like national debt and uncontrolled printing of the FIAT dollar etc)

Question:
If the dollar loses two thirds of its value in the nearby future and in a short period of time.

1) What do you think will happen to your brokerage/trading account?
2) What will happen to your broker if all of his assets are kept in USD during such an event?
3) How do you think it will affect your trading capital?

Let us stick to the questions above and not get into why, if and when will it happen?

Inflation wouldent be a Problem for the Brokerage, the loss is on your side. In most cases The (cfd )Brokerage holds money is segregated Client accounts, so the question is, what happens to the banks that holds that money and to what degree is it insured?
Your trading capital is not adjusted to Inflation, if you have 20.000$ capital and 20.000$ became wothless, it wont be a Problem for the Brokerage to pay you out Worthless 20.000$. Massiv Deflation is what could be a Problem, but i dont see that happening, further Inflation is not a Problem for the Brokerage, only a value loss for you.

Thats just my guess and opinnion, what im more scared of is what happens to stocks and indicies, they would rise with Inflation, even in a recession same as in argentinia, Turkey, Venezuela, Iran and Germany during their Inflation Periods, those assets (trading Instruments) are adjusted to Inflation and they will rise, bad fundamentals wouldent mean much.
Im pretty sure it could happen in the usa too, becouse thats the only realistic way they can pay their 33.7 trillion usd dept.

Right now im not sure if i should hold my own capital in USD or in EUR or in other currencys.
My brokerage offers gold or BTC as Terminal currency, i was thinking about Gold, becouse that Can gain or Store value, the question is just how does the Brokrage Store that money If i deposit in USD? Do they buy Gold or do they just Store my USD at their own risk?

First of all, forex is not an asset class. It is an exchange mechanism. So the answer to all three of your questions is... nothing. Because the value of dollar is irrelevant to the number of dollars that exist in the account.

Reputable brokers don’t take directional bets. They hedge net exposures. So it should not matter to them what happens generally. Though a move like you suggest might blow up a larger than normal number of client accounts, and some could conceivably lose more than they have in their accounts, which the brokers would have to eat and could potentially cause some solvency issues. It really depends on the velocity of the move.

Second, you can’t have a coherent discussion about what will happen without addressing the why of the price change.

Outside retail forex, nobody “invests” in the dollar. They invest in assets that are denominated in dollars. Foreign investors have to exchange their local currency for dollars in order to purchase the assets. Repatriating the money back home requires selling dollars to buy the local currency.

So really, the only way we could get to a place like you describe would be for foreign investors to dump their US assets and repatriate.

Nobody is going to be motivated to sell US assets because of the petrodollar status. Oil produced in the US will forever be priced in dollars. So maybe the dollar falls if OPEC switches to pricing oil in Yuan or Euros, but it isn’t going to get you anywhere close to a 66% drop in the dollar exchange rate. The entire oil market represents <3% of global GDP or ~12% of US GDP. It's also worth noting that the dollars Saudi Arabia (for example) receives for its oil are quickly exchanged back into Riyals by Saudi firms because they have to pay their expenses in Riyals. So the petrodollar thing is much to do about nothing.

It seems you have a fundamental misunderstanding of the reserve currency market. It is standard practice for sovereign nations to hold a basket of currencies. Has been for a long long time. The worst that could happen would be that the weightings of the basket are adjusted and fewer dollar denominated bonds are held overall, but again, that isn’t going to deliver anything close to 66% because total dollar reserves held by sovereigns are but a tiny fraction of total US dollars.

So what your really talking about is a wholesale abandoning of US “ASSETS” like stocks, bonds, real estate, etc. Why did that happen?

But just for the sake of argument, let’s assume it did. What would happen next?

A) US exports would explode higher as foreign citizens purchased more US goods at a substantial discount.

B) US imports would collapse because US citizens would have to pay substantially more for foreign goods.

C) Foreign investors holding US assets would be sitting on massive mark to market losses on unhedged exposures.

D) US investors holding foreign assets would see windfall mark to market profits on their unhedged exposures.

E) Foreign investors who still had money to invest would seek to purchase US assets with their now more valuable foreign currencies, while US based investors cut back on foreign investment.

Interestingly, the US would probably not experience a recession in your hypothetical scenario because inside the US a dollar would still be worth a dollar. It would, however, likely prompt the central bank to hike interest rates in order to give the market a compelling reason to buy more US assets, which could cause a recession as the cost of capital made projects inside the US prohibitively expensive to finance.

And just as quickly as the price of the dollar relative to foreign currencies declined, it would likely revert back to something much closer to where it is now. Unless there was a good reason for it not to. Which gets us back to asking why all this happened in the first place.

In closing I’d just like to point out that the Japanese Yen has lost about 30% of its value relative to the dollar over the last 2 years. Their stock market is up. GDP is up. And if they weren’t sitting on a mountain of inappropriately priced debt, the Japanese people would be pretty happy with the situation.

Hope it helps.

We are edging closer and closer to this event....

First, the USD has not lost its petrodollar status. Anything you have read regarding this topic that states that the USD is no longer dominate in oil trading are wrong. Second, BRICS is not a threat to the USD reserve status. Again, anything you have read that says otherwise is wrong. The notion that a BRICS currency will emerge that is backed by gold is laughable, let alone the idea that it would replace the USD as the reserve currency. However, it is true that international trade has evolved to include currencies other than the dollar, but in most of those cases, the non-USD currency is rarely held in reserve and often quickly converted to USD. Finally, fear not about your brokerage account, if you have an account with a reputable broker (based on your questions, you might want to be cautious in trading currencies, too).

Couldn't agree more. The U.S. has the most liquid, largest capital markets in the world,,,, by far. The largest producing Oil nation.
If the dollar were to lose 2/3 of its value I dont think most would be too worried about their trading accounts. The entire worlds economy would
crash and most would be in bread lines.... Just my non professional opinion

WOW!! lots o USA tamborines here hey. da slow long game is always hardest to see. dat with a bit o common sense. know when to scoop n know when to step outta da way. ppl talk funny talk bout the US n all dat. never da full facts. mmm too uncomfortable hah. id say if u like to operate in da mid range of society, then just have some drinks, smoke a reefer n go to bed n forget-about-it !! no point stressin n worryin. id LOVE to see a real n full fledged discussion put in da table where ALL facts are inserted, no matter how uncomfortable it makes ppl. now THAT would be a sight ...... but this piddly ass dribble my god.

btw what u ppl fear happenin da MOST has ALREADY taken place in other times in human history. care to rememeber? or does dat become too uncomfortable too?

see? when u get past the bs talk n flag opinions, ur left with the facts n somethin closer to da truth. so to answer da Qs ud need to be truthful n not put ANY stok in opinions. so askin selfish derived questions will only give .... well ..... all this mush. these ppl dont know crud. take a goooood hard look at da responses. REALLY look.

for eg

whats da world open debt level?
HOW does da US translate unsecured debt in all forms to somethin useful?
what % of world unsecured debt is held on USA books?
what % of worldwide incomes produce taxes to pay down total unsecured debts vs future projections of secured debts??
how much is held by brokerages on US soil on behalf of !!traders/investors!!?

so fuck the economists n latest news n opinions. go grab a forensic accountant n see if they only deal in opinions.

ALL this involves US citizens ALL over da world. remember = !!worldwide incomes!!

if u only look at petrdollar ur blind. monied accounts ur blind. I WOULD LOVE TO AUDIT DA USA SOMETIME. imagine da bs n blunders n coverups n misuses ud find. imagine HOW ur !!account!! is exposed. forget !!open positions!!.

i see da thread starter dont wanna ask real qs .... so again .... go drink smoke n sniff it up n forget bout it. clearly ur in no position to deal with anythin real. have fun

People who deliberately ignore the evidence of their senses are as impaired as those who are physically blind.

Be careful in the middle of the herd. The abyss is straight ahead.

The financial scales are about to get flipped.

The result of the pending dollar implosion goes far beyond your little trading account......

We will gather here on the other side of this.

1. “Let me issue and control a nation's money and I care not who writes the laws.”

What, exactly, is being ignored?

the list of whats being ignored is vast. but these places arent the place 2 really discuss anythin. and it wont matter if an implosion appears, ppl wont learn so their way o life will continue to be perishable. gotta luv human ingenuity. have fun