In order to try to answer the question lets define collapse. Currency collapse is the abrupt decline in the value of a currency caused by a loss of faith in its stability or in its utility as money—either as a way to store value or as a means of exchange.
The dollar has strengths. It is the most important reserve currency of the world and this gives it more legitimacy in the eyes of domestic and international users. Also, the US economy is the largest in the world. So as Americans keep using the dollar, it is backed by the productivity of the American worker
The dollar has also weaknesses. It may be created out of thin air, since it is not backed by gold or any other commodity. If the monetary policy becomes irresponsible, the dollar will suffer.
The dollar could collapse in a scenario of high inflation and high debt. Inflation can cause interest rates to increase. If foreign creditors decide to get rid of dollars because the US government has trouble paying the interest on the debt, the dollar could collapse. I believe it is important to keep a good relationship with the creditors and to manage monetary policy responsibly. Spending reduction and increased economic activity will make the temptation of printing more money more difficult.
This post is intended to only raise awareness. In order to make actual financial decisions please contact your financial advisor and/or tax advisor prior to making the decision.
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The US Debt Clock shows 28 trillion in debt and $153 trillion in unfunded liabilities for a country with a GDP of $21.43 trillion.
Debt and inflation could easily created a cascading failure that takes out the dollar.
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I agree. Inflation is showing up already
It is true that the situation in the United States is not the best, their public debt is very high, but I do not think that the dollar in the next two or three years will collapse.
A sudden collapse is probably not likely, but a progressive decline is the scenario we could be looking into