Source from YOUTUBE
Source from YOUTUBE
Based on the discussion in the Stansberry Investor Hour, here are some key points explaining why the $USD Index(USDindex.FOREX)$ might fall in the next 10 years:
USD index Monthly chart, by May 6th 2026
Monetary Policy and Inflation
Money Printing and Inflation: Larry Leard argues that the current monetary system is under stress and is essentially broken. The government has been engaging in significant money printing to cover large and growing deficits. This money printing is almost a mathematical certainty given the current economic situation. As a result, inflation is likely to become a persistent problem. When inflation rises, the value of the dollar typically falls because it erodes the purchasing power of the currency.
Bond Market and Interest Rates: The bond market is becoming increasingly frustrated with holding long-duration bonds that pay less than the rate of inflation. To keep the system going, the government may continue to print money, which will further fuel inflation and put downward pressure on the dollar.
Economic Troubles and Uncertainty
Economic Challenges: The economy is in deep trouble due to various factors, including tariffs that have disrupted trade and global supply chains. These issues are expected to cause a rough ride for the economy in the next few years. Economic instability often leads to a loss of confidence in the currency, causing its value to decline.
Unintended Consequences: Efforts to reshape the economy, such as imposing tariffs and trying to bring manufacturing back to the US, may have unintended consequences. These actions could disrupt the stock and bond markets, leading to a loss of confidence in the dollar and potentially causing it to fall.
Alternative Assets and Safe Havens
Gold and Silver: Gold has surged to new highs recently, indicating that it is signaling monetary debasement and acting as a safe haven. As people lose confidence in the dollar, they may turn to gold and silver as alternative stores of value. This increased demand for gold and silver could further weaken the dollar.
Bitcoin: Bitcoin is also emerging as a potential safe haven and a form of digital gold. Its limited supply makes it an attractive asset in an inflationary environment. If more people start to view Bitcoin as a reliable store of value, it could gain value at the expense of the dollar.
Policy and Political Factors
Potential for Policy Changes: There is a possibility that the US may need to make significant changes to its monetary system in the future, such as returning to a gold standard or backing the dollar with Bitcoin. Such a shift could have profound implications for the value of the dollar. If the dollar is no longer seen as a reliable currency, its value could decline.
Political Uncertainty: The current political climate and the potential for future policy changes add to the uncertainty surrounding the dollar. The discussion suggests that the current administration may be aware of the Triffin dilemma and the need for a new monetary system, but the path forward is unclear. This uncertainty can lead to a loss of confidence in the dollar.
Historical Precedents and Cycles
Historical Cycles: The discussion references historical cycles of economic and monetary crises. The current situation is compared to past events where fiat currencies have failed and hard money has eventually been restored. The speaker believes that the current trend of money printing and inflation is unsustainable and that history is likely to repeat itself.
Long-Term Trends: The speaker emphasizes the importance of understanding long-term trends and cycles. The current environment is seen as part of a larger cycle where the dollar is likely to weaken over time due to persistent inflation and economic instability.
A tool to boost your purchasing power and trading ideas with CashBoost!
Open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with upcoming 0-commission, unlimited trading on SG, HK, and US stocks, as well as ETFs. Find out more here.
Other helpful links:
Comments