As I wrote this article, these lyrics from “For The Love of Money,” a 1974 song by The O’Jays, popped into my head:

For a small piece of paper it carries a lot of weight…Call it lean, mean, mean green…Almighty dollar!

Let’s step back from the daily ups and downs of the stock market, to debunk a few myths about the U.S. dollar. To make the right investment decisions, you need to deal with reality, not ideological fever dreams.

Fearmongers warn that “the currency wars” will trigger a crisis in America. These purveyors of doom argue that the U.S. is becoming a third-world country. They predict that the U.S. dollar will crash, causing bank runs, an economic depression, and a dystopian hellscape of poverty and crime.

I’ve heard these same views repeated over and over again, year after year, ever since I started in publishing 40-plus years ago. The historian Richard J. Hofstadter famously called it “The Paranoid Style in American Politics.” In the Internet age, paranoid theories spread even faster and wider. A disaffected, low-information audience is susceptible to these ideas (and they’re gullible enough to buy the survivalist gear and dietary supplements that the doomsters sell on the side).

Read This Story: Wall Street’s Return to Normalcy

As the U.S. economy has remained resilient despite persistent inflation — and as geopolitical turmoil strengthens the greenback’s safe-haven appeal — the dollar has skyrocketed in recent years.

Bromance of the autocrats…

Among the many things they have in common, Russian President Vladimir Putin and Chinese President Xi Jinping are set on reining in what they regard as American “imperialism.” (Cold War rhetoric just won’t die.)

Notably, Putin and Jinping have taken steps to dethrone the U.S. dollar in global oil markets. This included getting Russian and Chinese fossil fuel behemoths, Gazprom and China National Petroleum Corporation, to switch payments for gas supplies to rubles and renminbi instead of dollars.

China has long regarded the position of its renminbi within the international roster of currencies as a reflection of its own geopolitical and economic clout on the world stage.

China has expressed its desire for a new global reserve currency to replace the U.S. dollar. A popular theory among the podcast pundits is that the People’s Bank of China is hoarding gold as part of its nefarious plan to convert the yuan to the gold standard and supplant the dollar.

As the largest annual gross crude oil importer in the world, China recognizes that it’s tangentially vulnerable to the pressures of U.S. foreign policy through the oil pricing mechanism of the greenback.

Russia also perceives the U.S. dollar as a geopolitical weapon, especially since the U.S. government excluded the country from the use of the dollar to sanction Russia for its invasion of Ukraine.

The dollar is the default denominator in world trade and the prime repository for the foreign reserves of the world’s central banks. This reserve status is based on the size and strength of the U.S. economy and the dominance of America’s financial markets.

The world’s most valuable commodity, crude oil, is quoted in U.S. dollars. Countries that import oil pay for it with dollars; those that export the oil receive payment in dollars.

For decades, the “America-is-in-decline” school of thought has been wringing its hands over the supposed demise of the U.S. dollar as the world’s reserve currency. But overthrowing the dollar won’t be easy, and as the following chart shows, its value has risen since 2020:

The DXY shows investors the strength of the USD against a basket of other major currencies. The Russia-Ukraine war and concomitant energy woes in the European Union have particularly depressed the value of the euro.

The dollar has retained its status as the globe’s reserve currency because, despite China’s threats to the contrary, no viable alternative has arisen. Nor is an alternative on the horizon. China earlier this year launched its central bank digital currency, the digital yuan, de facto backed by gold. But there still isn’t much day-to-day usage of the currency.

A state-owned cryptocurrency is an inherent contradiction. The appeal of crypto and gold is their avoidance of government or central bank monopolies of money. For any currency to be a global reserve of value, and a pervasive method of exchange and unit of measure, it requires transparency and stability.

However, China is one of the world’s most tightly controlled economies. The country’s financial system also lacks transparency, as evidenced by the recent de-listing of major Chinese companies from the New York Stock Exchange because of their resistance to tougher auditing.

What’s more, China’s economic slowdown, massive debt burden, crony capitalism, and worsening property crisis make it hard to believe that the country will soon take over the world. Just ask the angry customers and vendors who got stiffed by China Evergrande Group (OTC: EGRNF).

The dollar is the most traded currency in the world. About 40% of international trade transactions in goods are invoiced in dollars, whereas the figure is 3.2% for the yuan. America’s currency and capital markets are transparent and open; legal and investor security are strong.

The U.S. dollar should remain “king” into the foreseeable future. Regardless, don’t get distracted by its fluctuations, nor by theories about its supposed decline. Stick to your investment plan; that’s the best way to increase the dollars in your brokerage account.

Editor’s Note: If you’re looking for ways to generate steady income, consider my colleague Robert Rapier.

Robert wants to give you exclusive access to all his lucrative income picks…forever.

Robert Rapier is offering a legacy membership to ALL THREE of his income investing advisories: Utility Forecaster, Income Forecaster, and Rapier’s Income Accelerator. His new three-in-one service is called the Platinum Income Alliance.

This deal is so lucrative, and stacked so heavily in your favor, Robert can only let 100 people through the doors. Take advantage of this rare opportunity by clicking here today.

John Persinos is the editorial director of Investing Daily.

Subscribe to John’s video channel: