

The gold and silver market is another sign if a softening dollar. The treasuries will be slower to move, but record high gold and silver prices are a terrible sign for investor sentiment. In 2023 I said dedollarization was a meme. 2025 made it obvious it was inevitable. The question is just when Europe and the rest of the world will take back the US’s exorbitant privilege, and how badly they’ll react when we do.


I mean, a weaker currency really does boost your export value. That’s why Canadian farmers tend to consider the weaker CAD a benefit - they get paid more CAD per yuan when exporting soy or canola for example.
The issue is that the US intentionally positioned itself with a strong dollar so they can import stuff cheaper. The deal for American “exorbitant privilege” was essentially “hey America, you can have the world as your shopping mall with a strong currency for cheap imported goods, but in exchange you’ll provide the backing for collective defense with your extra budget, stay stable, and buy our goods”. Trump wants to have his cake and eat it too, maintaining the effective global tax via USD transactions but also have a weaker dollar for American exporters. This is all that hubbub about “reducing trade deficits”… which were created intentionally as part of that deal in the Bretton Woods/post-Bretton Woods Era.
US consumers like cheap phones, TVs, imported fruits, and travel. The strong dollar is a necessity for this. Much of the US debt is heavily subsidized as a side effect of a strong dollar as part of that exorbitant privilege exchange. They can have their weaker dollar but they’ll lose the benefits from it and I don’t think they’ll accept that easily. Throwing all that away to strengthen your export market is deeply foolish, but the mechanisms at play do work generally as they claim.