Will the fall of the Dollar be catastrophic for the American economy?

Answer: not necessarily.
When I published my poem “The Dollar Will Fall” on steemit, it didn’t get too many takers. Neither did it when I published the piece on my WordPress poetry blog a couple of years ago.
Of course this was to be expected, since for most Americans it sounds as if I would take pleasure in their economic misery.
Actually I don’t.
And if it’s a comfort for you, it seems to me right now that the Euro might fall quite some time before the Dollar.
And as a European I don’t mind that either.
What will happen is, that with a governmental pen-stroke the Euro will stop being legal tender, prices in shops will be rewritten and the banking accounts of all individuals and companies in all of the Euro countries will reverse to their former national currencies and the cash can then be exchanged in the following weeks and months.
The southern European countries and Ireland and some of the Eastern European countries will subsequently inflation their currency to free themselves from the until now unpayable debts.
Unless the governments or the central bankers responsible for their national currency are either totally incompetent or a bunch of traitors to their own people, this inflation will NOT turn into the hyperinflation so many people -especially Germans- are so paranoid about.
The hyperinflation of 1921 to 1924 was not caused by the German government willy nilly printing too much money in order to boost a failing economy or to devalue debts, but it was caused by a financially devastating lost war, unpayable reparation demands by the winners of the war and the privatization of the German central bank forced upon Germany by these same allied winners. The private central bank colluded subsequently with foreigners to hyper-speculate against the German currency.
At the same time France occupied the industrial center, the Ruhr area of Germany, in order to extort the reparations Germany was supposed to make in gold (and with all her most strenuous efforts couldn’t do) now instead in coal. That brought on a general strike of workers and miners in the province and further economic devastation until the French army left.
The conditions are very dissimilar in all of the European countries.
While some currency devaluation seems inevitable in the more debt-ridden countries, this economic devastation can easily be stopped, as long as the government has control over the central bank and the monetary system.
How I know that?
Because we went through a total financial collapse here in Iceland at the end of 2008. After five years of international total speculation with the Icelandic Krona -first up and then very fast down-, all 3 major banks went bankrupt at the very same time and the small saving-and-loan banks owned by the local towns and villages -which were intimately connected to those major banks- were also on the verge of going under.
This was the moment when the Icelandic government pulled the emergency break and stopped all currency speculation by Icelanders and foreigners alike.
Strict restriction were made for the exchange of the Krona into other currencies. You needed to have a good reason, like importing something from abroad or travelling abroad or paying tuition at a foreign university, to be allowed to transfer money abroad.
Of course protecting our currency brought our country instantaneously onto the list of “terrorism supporting countries”, alphabetically right next to Iran. For a few weeks we were under an international boycott. The international financial elites actually tried to starve us out.
Eventually the boycott was lifted. And after a year or so the economy started to recover, and now it is booming again. And while there surely was some hardship for many Icelanders, still nobody starved or had to sleep on the street.
Some laws were even put into place to help struggling home owners by relieving them of part of their debts.
The situation in America is of course slightly different from that in European countries, since the Dollar had been the world reserve currency for so long, only backed by the international oil-market.
With China and Russia slowly but certainly de-dollarizing their energy and other international dealings the rest of the world will eventually follow.
This means that too many Dollars will flood back into the American economy causing a lot of inflation. However since all American debts are also denominated in Dollars those debts could be minimized into next to nothing, while a new currency separate from the Dollar could be used for ordinary business. This could possibly be an internationally recognized crypto-currency or a new government controlled national currency.
Of course without the reserve currency status from now on America could no longer get the rest of the world to finance their military adventures and their mountains of arms larger than everybody else’s taken together.
Who knows, maybe peace will break out at last…
American middle class people could be protected by making a favorable exchange rate for citizens and legal residents inside the country (at least until a certain amount like a million Dollar or so per capita while all Dollar denominated assets abroad would be subject to market forces)
When Eastern Germany was united with Western Germany the German government created a two tier exchange system between the two currencies (so something like a two or three tier exchabge system would not be unprecedented)
Bottom line:
A financial collapse does not have to lead to a catastrophic economic collapse, if the government does not allow the bankers to ride roughshod over everyone else!