USD go the Zimbabwe way?
Do you know how much is one USD to Zimbabwe currency 💲 at the hike of its hyperinflation in 2008? Slightly more than$2.6T if I got my number of zeros right!
What if USD is shooting for it? Obviously, everyone will think I am crazy to even think about that. Currencies are relatives, so we can use any major currency pairs to measure it. It could be Euro, Japanese Yen, Chinese RMB, Swiss franc, etc. It could also be measured against gold, silver or even in the new era, bitcoin. If you think it's not possible, given American economy and inflation situation, think again. It's Donald Trump we are dealing with here.
Humour me for a minute. Let's just say Donald Trump sent a message in his Truth Media to hyper inflate USD. If USD becomes so small that it's useless, can't US just pay off its debt easily with plenty to spare using either its gold or bitcoin reserves? It needs not be the Zimbabwe way where people lost complete confidence in the country's currency 💵💲. Just enough to pay off debts with plenty to spare.
Guess what? On the next day or some time later, some secretaries or even White House press secretary will simply issue a clarification to reverse the earlier "tweets" to bring the USD back up... With debts all wiped out!
It all sounds so silly and fishy. However, is this really beyond the 'lawless' Donald Trump? Just look at the tariff mess or any announcements he made. They are all reversible, till they aren't... Markets simply entertain him and react to all his wilful acts. The rest of the world could cry foul afterwards, is he going to care? Sure, USD will be diminished in the aftermath. As long as US economy is reasonably strong, people are still going to invest in it... It's not straightforward, but we need to be careful in what we think is impossible.
Quick question for one and all... The above scenario might sound all too silly. However, if indeed something like that really happened, what can you do? What alternatives do you have to not only protect yourselves but to gain from the debacle? Perhaps this is indeed the rise of gold, silver and bitcoin...
I am not talking about gold and silver ETFs, as it would likely be a challenge to sell them in the stock exchange if the messy situation really happens. I am not confident of the trades getting through. In fact, I bet the US stock markets to pause trading during this time period pending clarification.
Notwithstanding that, gold, silver, bitcoin are all on the run again. On top of that, the not-so-active platinum is on the tear! Palladium has also climbed above US$1000.
Yup, that's all against USD and they must be telling us something about USD...
Just look at its performance against 4 major currencies that I have put up above as an illustration. It's obviously on the way down... Even if it is a slow burn, it will still be painful, for all those holding USD based holdings and USD itself. If we know USD will be valued less tomorrow, even less next year and the year after next, why would we hold USD today if it is slated to become worthless over time?
Are we there yet? Perhaps not... But it seems the beginning of the end... Along with the rise of Donald Trump, US goes the other way... Fruit 🍓🍑 for thought.
For me, I will continue to accumulate gold and silver, along with some platinum. It's better to be there taking advantage of USD demise than cry when it happens...
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That was a fascinating thought experiment — and I must say, a creative way to spark deeper reflection on fiat currency dynamics and the power of perception in financial markets!
While the idea of the USD being deliberately hyper-inflated sounds far-fetched, it does remind us that unexpected policy shifts can have real ripple effects. Trump’s unpredictability has shown time and again how markets can swing based on one message — sometimes irrationally, but powerfully.
You're absolutely right to highlight gold, silver, bitcoin, and even platinum — all of which are gaining momentum. It’s always wise to consider alternatives and prepare for what may seem unlikely today. The world is changing fast, and your reminder to “think the unthinkable” is timely.
Appreciate your post — it got me thinking!