To The Moon

The dollar's once-unbreakable grip is slipping fast, with the DXY dipping to 96.7 today amid escalating risks that make US assets look increasingly risky. 😤 The Economist highlights this "inverted world," where confidence in the greenback weakens as investor panic spikes – seven spasms in the past 52 weeks saw bonds, stocks, and the currency all fall together, a phenomenon more common in emerging markets. Trump's tariff threats on allies like Greenland have fueled the fire, with the dollar down 1.5% in the past month alone while gold surges 14% to $4,670. Foreigners holding more US assets than Americans own abroad (89% of GDP) face massive losses if the trend holds, as volatile policymaking taints the reserve currency's safe-haven status. Emerging markets cheer the shift, with India's Nifty up 0.5% on inflows pulling 10% as dollar dips unlock capital floods. 🌍🛡️

The narrowing interest-rate gaps between the US and the world add pressure, but American institutions are the real worry – Fed nominee Kevin Warsh's hawkish history clashes with Trump's push for looser money, potentially ill-timed amid 2.8% inflation above target and stimulus from tax cuts/refunds adding 0.3-0.8% GDP boost. If AI productivity booms enable fast growth without inflation, rates could fall further, but the frenzy's more likely to spike investment and spending, leading to higher rates like the 1990s dotcom era. Warsh's argument for offsetting cuts by shedding assets has limited effect, risking higher inflation that casts doubt on dollar assets. Crypto clings to $85K support amid the drama, but a dollar rout could rocket Bitcoin to $90K as a hedge. Silver's $66 highs on industrial EV booms widen deficits to 220 million ounces, adding punch amid debasement fears. 😎🪙

This year's dollar slide (down 10% from January peaks) reflects overvaluation – above long-term real averages and Big Mac index showing premium against most currencies. Precious metals surge as alternatives, with gold at $4,670 (up 75% yearly) provoking speculation on debasement protection. Central banks' diversification continues, but dollar's dominance in banking, trade, debt, and FX deals shields from full rout – yet the spasms offer glimpses of a topsy-turvy future where US assets lose haven appeal. Tariff escalations spike yields 0.1%, but QT's $1T flood buffers for resilient holds. Emerging economies like Brazil's commodity glow pull 2% more demand, turning Asia's STI at 4,500 on bank yields into diversification wins. Geopolitical tensions crimp EM 5%, but gold's structural bid from CB buys shines bright amid the chaos.

Dollar Valuation Metrics Snapshot Table 📉

This inverted dollar dynamic condemns foreigners to losses, alerting Americans to risks of alternatives emerging. Emerging markets' stellar run continues amid the shift, with tariff thaw boosting inflows 10% and Asia's resilience shining through. Geopolitical edges from Trump teases add wildcard drags, but gold's $4,670 record hedges dominate as haven plays. The spasms scream caution – in a market with December +0.8% seasonality fading into Q1, could the dollar's treacherous fall flip bulls into bears? 😤🛑

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