The global economy is experiencing significant tectonic shifts, with the US dollar at the center of these changes. Current administration policies aimed at altering the dollar's role are poised to create unprecedented consequences in financial markets, potentially leading to major investment opportunities.
The Weakening Dollar: Recent Trends
Since the beginning of 2025, the US dollar has shown weakness against various currencies, including:
-
An 8% decrease against the Japanese yen.
-
A 9% decrease against the euro.
-
A 13% decrease against the Swedish krona.
-
A complete collapse against the Taiwan new dollar in a short period.
This widespread strengthening of global currencies against the dollar appears to be a deliberate outcome of Washington's policies.
Washington's Stance: The Case Against a Strong Dollar
The US government believes the dollar's strength and its status as a global reserve currency are contributing factors to domestic economic problems. These include:
-
A decline in manufacturing employment.
-
A large trade deficit with other nations.
The theory suggests that a strong currency makes US goods less attractive to foreign buyers. Weaker currencies are a strategy to boost local manufacturing. The current administration has expressed its desire to weaken the dollar to stimulate economic prosperity.
Tariffs as a Tool: An Attack on the Dollar's Strength
The recent implementation of tariff policies corresponds with a significant decline in the US dollar against the euro and a break in a major uptrend dating back to 2008. While these tariffs are presented as trade renegotiations and revenue generation tools, they may have a deeper purpose: weakening the US dollar.
-
Over 54% of global trade is conducted in US dollars.
-
Approximately 90% of foreign exchange transactions involve US dollars.
By slowing global trade, tariffs could reduce demand for US dollars, diminishing the incentive for international institutions and businesses to hold the currency. Isolationist tariff policies could result in a weaker US dollar, triggering considerable repercussions in global financial markets.
Historical Precedents: Lessons from the Past
Historical currency collapses offer valuable insight. The collapse of the Dutch Gilder in the 1800s, then the dominant global currency, led to a massive flow of capital towards the British pound as the British economy grew. Similarly, the decline of the British pound as a reserve currency a century later resulted in a capital shift towards the US dollar, reflecting the United States' rise to global prominence.
The Search for a Dollar Replacement: Challenges and Opportunities
While the US dollar faces challenges, finding a clear replacement is not straightforward.
-
The euro faces economic and geopolitical risks, including conflict in Europe and slow economic growth.
-
The Chinese yuan encounters geopolitical risks with tensions in Asia and economic concerns, such as a declining population.
Instead of a currency taking over, assets recognized as stores of wealth, like gold, may benefit from the current situation.
Gold: A Safe Haven in Uncertain Times
Gold prices have risen, potentially due to investors seeking alternatives to the US dollar. Continued dollar weakness could further drive gold prices higher in the coming years. While short-term consolidation is possible, a significant buying opportunity for gold may emerge later in the year.
Bitcoin: Digital Gold
Bitcoin, launched during the 2008 financial crisis, offers another alternative. Bitcoin rallies have often coincided with periods of US dollar weakening. If the US dollar weakens, Bitcoin could perform strongly, positioning itself as a viable alternative.
{# 
{#