There are growing concerns about the U.S. Dollar’s steady decline; experts are highlighting its eroding value and its global standing.
‘Trump Is Exacerbating’ Its Decline
On Monday, in a post on X, risk analyst and author of The Black Swan and Antifragile, Nassim Nicholas Taleb, highlighted the dollar’s decline in value relative to gold in recent years.
“The dollar lost 40% of its value in terms of gold,” he says, over the past two years alone, referring to gold prices that have increased 81.83% during this period in dollar terms. He adds that “Trump is exacerbating” this decline, referring to President Donald Trump’s trade and tariff policies, alongside his growing attacks on the Federal Reserve to cut rates.
Taleb posted this in response to a post that highlights India’s central bank, the Reserve Bank of India, increasingly diversifying away from U.S. Treasuries, in favor of the yellow metal.
Investor and former CTO of Coinbase, Balaji Srinivasan, echoed similar concerns, warning that “the dollar is losing reserve currency status.” Citing IMF data, he noted it has dropped to “42% of global reserves” as gold continues its surge.
He says, “gold is returning as the reserve currency of the state,” adding that digital gold is soon becoming the “reserve currency of the individual.”
While the Federal Reserve admitted that only a “small number” of countries were shifting to gold, Srinivasan points out that this group includes “Russia, India, and China: the RIC of BRICS,” which he says is a “huge deal.” He attributes this to the tariffs, sanctions and the persistently high fiscal deficit.
Trump’s Weak Dollar Dream ‘Will Be A Nightmare’
Since Trump took office on Jan. 20 this year, the U.S. Dollar Index (DXY) is down 10.51% as of Thursday, down from 109.35 to 97.839. This leaves it on track to hit its worst performance in over 30 years, when it witnessed a 14.68% decline within a year.
Trump has himself repeatedly called for a “cheaper dollar,” telling White House reporters recently that while “It doesn't sound good, but you make a hell of a lot more money with a weaker dollar, not a weak dollar, but a weaker dollar than you do with a strong dollar.”
Economists such as Peter Schiff have pushed back against, saying that “Trump’s weak dollar dream will be a nightmare,” citing inflationary pressures.
Photo Courtesy: Mc_Cloud on Shutterstock.com
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