[E3286] The dollar is 'still structurally weakening beneath its surface' according to SightBringer. This is listed among the unchanged structural drivers that support the longer-term Bitcoin thesis. The fiscal regime remains unsustainable, the monetary system fractured, the Treasury boxed in, and the Fed cornered — all conditions that favor Bitcoin's eventual repricing.
[E2994] Deutsche Bank maintains dollar bearish outlook for 2026. USD no longer exceptional as a high-yielder or global growth outlier. Potential for rising hedge ratios on US assets points to further USD weakness. EUR/USD forecast at 1.25 by year-end 2026 (from 1.18 current). USD/JPY forecast at 145 by year-end 2026 (from 156 current).
[E3055] Hartnett's explicit trade recommendation: short US dollar with DXY target of 90. Peak US exceptionalism narrative is inverting. Five historic dollar bear markets show gold and EM stocks as big outperformers with average returns of 141% and 104% respectively versus 15% for S&P 500. Current 'America First' dollar bear has already delivered 100% gold returns and 31% EM returns.
[E2968] PBoC signals tolerance of gradual CNY appreciation. With USD weakening, corporates raising hedging ratios and increasing conversion of FX proceeds into CNY. Beijing showing willingness to rein in industrial overcapacity and excess price competition, reducing negative spillovers to trading partners. Mild CNY appreciation provides positive backdrop for managing trade relations.
[E3054] Hartnett frames the US dollar as in a structural bear market, down 12% since Trump inauguration. Five major USD bear markets since 1967 averaged -30% peak-to-trough; current decline could extend to DXY 90. Weak dollar is deliberate policy to boost manufacturing in swing states (PA, MI, WI). Presidential approval and USD are highly correlated in both Trump terms — dollar weakness aids financing of $39tn national debt (up $15tn or 64% in past 5 years).
[E2952] The CNY's strength is partly driven by investors rotating out of US assets on geopolitical and valuation concerns into relatively attractive China assets. USD/CNY broke below 7.0 for first time since 2023 in January 2026. CACIB expects the positive shift toward CNY appreciation by PBoC can be sustained with a more benign external environment.
[E2995] Strong conviction on USD/CNH moving further below 7.00 as Chinese policy objectives of internationalization and rebalancing the economy align with a stronger currency. Starting valuation extremely cheap and Chinese corporates beginning to convert substantial FX deposits. USD/CNY forecast at 6.70 by year-end 2026.
[E2889] Carry strategies remain appealing to UBS, supported by global fiscal stimulus triggering stronger growth in late 2026 and declining US yields in 1H26. Swiss franc is best funding currency given low yield. CNY upgraded to Attractive from Neutral. Maintains Attractive on EUR, AUD, NOK alongside selective high-yielding EM currencies.
[E2718] Putin warned in June 2022 that global reserves would convert from weakening currencies to real resources like food, energy, and raw materials. Gold and silver performance since validates this: gold +162%, silver +332%. The monetary system is transitioning away from USD-based reserves.
[E2717] Global trade imbalances moving into gold instead of USD financial assets will rebalance currencies around Balance of Payments using gold as pivot. On BoP, the USD is the 'dirtiest dirty shirt' and should fall sharply versus BoP creditor currencies (CNY, JPY, EUR). Gold's share of FX reserves is rising while USD share is declining.
[E2846] UBS rates USD as Unattractive, citing structural headwinds from US large twin deficits, investor concerns about Federal Reserve independence, and increased hedging demand for US holdings. Notes the dollar has shown atypical depreciation around tariff threats — dynamics typically seen in EM during financial stress — suggesting higher risk premiums being priced into US assets.
[E2319] Japanese debasement and weak Asian FX spurring 'big capital outflows into US & EU assets' — Korean retail has invested $100bn into US stocks since 2019. Silver in yen at all-time highs signals currency debasement. AUD/JPY above 110 would represent multi-year breakout to 35-year high indicating 'risk-stays-on.' Failure would signal peak of 'weak Asia FX-big outflow' cycle.
[E2434] Dollar Index broke major momentum structures in March and April 2025 (from 104.21) and has 'lived below those breakage levels since.' Price chartists have been buying the dollar 'with no success' as momentum remains broken. A monthly close below 97 starts the 'next phase of what will likely be a major decline.' Current DXY at 97.45.
[E2435] Dollar weakness will affect other markets once price confirms what momentum has already declared. 'Price is often lagged to its own momentum trend shifts' — the price chart hasn't fully reflected the March 2025 momentum breakdown, but 'if price slips much more, then even the price chart folks will realize something is wrong! Too late, though.'
[E2383] UBS cites weaker US dollar in first half of 2026 as key driver for precious metals and commodities. Dollar depreciation was among factors driving 2025 precious metals outperformance (75-80% returns). Oil demand outlook underpinned partly by weaker US dollar supporting emerging market consumption.
[E2296] The US dollar's share of central bank reserves continues to decline, now running at 39.9%. This ongoing decline occurs alongside gold's rise to nearly 30% of reserves, supporting Wood's thesis of continuing fiat debasement and a transition to a de facto gold standard.
[E7860] CNY overtook USD as most-used currency in China's cross-border transactions. China switching commodity imports from USD to CNY reduces USD outflows and manages dollar liquidity while maintaining manufacturing surpluses. This de-dollarization trend coincides with declining foreign official UST purchases since 2013.
[E7873] China-Iran energy deal worth $400B+ allows China to buy energy in yuan at up to 32% discount, ending China's dollar shortage and accelerating de-dollarization of energy markets. Combined with foreign central banks reducing Treasury purchases, the structural driver of dollar demand is weakening as the Fed is forced into monetization that debases the currency.
[E7881] De-dollarization is accelerating in energy markets: Russia increasingly sells energy to Europe in EUR rather than USD, Chinese oil imports from Saudi Arabia rose 84% (potentially settled in CNY), and the CNY oil contract has gained more market share than expected since March 2018. Saudi Arabia potentially pricing oil in CNY would mark 'a significant change in the way the world has worked since 1973.'
[E7885] If Germany begins running fiscal deficits after years of surpluses that helped finance US deficits, it would force unwinding of 'borrow EUR, buy USD' carry trades, potentially strengthening EUR significantly. Gromen notes reports of Germany considering deficit spending and that EUR is 'universally hated,' setting up a contrarian bullish EUR/bearish USD trade.
[E7895] The end of petrodollar recycling removes a key structural support for the US dollar. BRICS nations no longer automatically convert commodity revenues into USD-denominated assets, reducing global dollar demand. Gromen argues this shift is permanent and accelerating as more commodity producers seek sanctions-proof settlement alternatives.
[E7911] BRICS expansion of non-USD commodity pricing and gold settlement, combined with the Fed's Quasi-Fiscal Deficit forcing perpetual money printing, supports the structural USD bear thesis. The gold arbitrage mechanism between Western and BRICS markets specifically pressures USD-denominated gold pricing and accelerates de-dollarization of commodity trade.
[E5756] Gromen is bearish on USD due to forced Fed monetization of deficits. The US runs twin deficits (fiscal and trade), has a negative 50% GDP Net International Investment Position, and is externally funded. A potential Bernie Sanders presidential victory could further accelerate USD weakness. The Fed planning $365B of term repo operations through January 2020 signals ongoing monetary expansion pressure.
[E7926] While USD benefits near-term from the capital crunch as the only safe haven, the structural fiscal trajectory (120% debt-to-GDP, 7-8% deficits) will ultimately force Fed intervention that undermines the dollar. The Fed must eventually choose between defending the dollar and backstopping the banking system.
[E7936] Luke Gromen argues direct debt monetization and unsustainable deficit dynamics — with debt growing faster than GDP by a 'significant margin' per Jerome Powell's November 2019 statement — point to eventual USD devaluation. In a material economic slowdown, the Fed would need to expand its balance sheet to Japan-like levels (100%+ of GDP), which would be structurally negative for USD.
[E5890] Gromen argues the NASDAQ/EAFE ratio drives USD more than interest rate differentials. As capital flows out of overowned US equities, this supports USD weakness and hard assets like gold and Bitcoin, suggesting structural dollar bearishness tied to equity rebalancing rather than rate dynamics.
[E7954] China has developed alternative payment systems and commodity supply chains, reducing US leverage significantly. China's industrial profits up 21% YoY while exports to non-US markets surge 8.3%. US exports to China represent only 2.8% of Chinese GDP, undermining dollar hegemony assumptions and US negotiating position.
[E7962] Gromen argues the US is officially abandoning 40 years of 'strong USD' policy due to national security concerns over a hollowed-out manufacturing base. The US defense industrial base faces ammo shortages in Ukraine and Boeing/submarine production delays, with the US 4-5x more expensive than China in critical manufacturing. Yellen's April 2024 China meetings signal this policy shift.
[E9586] BRICS countries (China, Russia, India) are advancing multi-currency energy pricing with gold settlement, undermining USD reserve status. Countries like Kenya and Sri Lanka are swapping USD debt for CNY debt at significantly lower rates (China 1.4% vs Fed funds 4.25-4.5%), reducing dependence on potentially weaponized USD swap lines. Gromen argues this accelerates structural USD decline.
[E7733] FFTT speculates that repeated Treasury visits to Beijing (second in three weeks) and PBOC comments about waiting for Fed easing suggest potential US-China coordination to weaken the USD — a possible 'San Francisco Accord.' Both countries reportedly need a weaker dollar for their respective economic challenges.
[E7747] FFTT warns of continued foreign UST selling for energy/currency defense compounding the Treasury supply/demand imbalance. The binary Fed outcome — either monetizing deficits through QE or allowing a spiking USD that triggers global collapse — both ultimately point to structural dollar weakness as fiscal dominance forces eventual monetization.
[E5726] US insolvency ratio is approaching levels that forced the 1985 Plaza Accord USD devaluation, with interest expense nearing 14% of tax revenues. Current conditions are far worse than the 1980s: 120% debt/GDP vs 37% in 1984, 8% deficits vs surpluses, and massive foreign USD asset holdings that must be sold to defend local currencies — a complete reversal of 1980s capital flows.
[E7775] US fiscal dominance structurally undermines the dollar: interest expense exceeding defense spending, 125% debt/GDP, 8% deficits, and NIIP at -79% of GDP. China's $254B capital outflows and BRICS de-dollarization via gold settlement reduce foreign demand for USD-denominated assets, creating a structural bear case for the dollar.
[E5827] With True Interest Expense at 108-130% of receipts and the Fed already reducing QT to accommodate fiscal pressures, Gromen's analysis implies inevitable Fed balance sheet expansion and USD liquidity injection to finance the government, structurally undermining dollar purchasing power regardless of whether the crisis resolves via inflation or deflation.
[E7785] Gromen argues 'sell USD' is the correct reaction to trade deals over the next 6 months. The Trump administration may implement capital controls via foreign withholding taxes on US financial assets, potentially generating $360 billion annually while raising cost of carry for foreign investors, forcing capital flows from financial to real assets and structurally weakening the dollar.
[E7800] Gromen identifies structural USD weakness driven by foreign central bank retreat from Treasury purchases (only $120B of $11T over 7 years), government share of GDP at 33%, continued fiscal expansion including 25% food stamp increases, and the Fed's inability to meaningfully taper without destabilizing government financing. The government's need for negative real rates structurally weakens the dollar.
[E7809] Gromen highlights that 30% of global central banks plan to increase Chinese Yuan holdings, up from 10% the prior year, signaling accelerating diversification away from USD reserves. USD increasingly offers negative real returns, with 10-year real rates potentially reaching -5% to -10%, weakening structural demand for dollars as reserve currency.
[E7825] US produces nuclear power at $12 billion per gigawatt versus China's $2 billion, suggesting the USD is massively overvalued. For manufacturing competitiveness, Gromen argues the USD may need to decline 25% or more versus the Chinese yuan. If China produces baseload electricity at 1/6 the US price, China's economy wins domestically and geopolitically over time.
[E5743] Using Bessent's rule that tariffs drive 2/3 currency appreciation, 100% tariffs could mechanically push DXY from current levels to 175-180, forcing foreigners to sell $8.5T in USTs to raise USD for debt service, collapsing bond markets and the global economy. This mathematical impossibility argues against sustained USD strength.
[E7845] Gromen declares 'this is checkmate — barring a productivity miracle, the release valve HAS to be the USD.' The ending of the global savings glut due to demographic decline in creditor nations reduces Treasury demand while US issuance explodes, and China's expanding CNY trade settlement reduces structural USD demand.
[E9386] Russia's demand for ruble-denominated gas payments from 'unfriendly' countries could force EU/US to sell dollars/euros to buy rubles for energy settlement. Combined with Russia's resumed gold buying, this could establish alternative energy-gold settlement mechanisms bypassing the dollar system entirely, structurally reducing global demand for USD reserves.
[E9418] India and Nigeria launching gold exchanges with INR trade settlement mechanisms suggests emerging market commodity trade moving outside the USD system. Nigeria as 7th largest oil exporter trading gold with India signals potential gold-backed energy settlements, which Gromen views as structurally bearish for USD dominance in commodity trade.
[E9435] Saudi Arabia raised US oil prices by $2.50-4.20/bbl while cutting Asian prices by $2.95-5.50/bbl for May 2020 delivery, making the same barrel 27-44% cheaper in Asia than the US. Gromen frames this as a de facto 27-44% USD devaluation in Saudi oil terms against Asian currencies, signaling structural USD weakness.
[E9458] Gromen is structurally bearish on USD, stating the only thing that would change his mind is if 'the US government begins significantly cutting spending, especially on Entitlements.' He notes USD bottomed precisely when the Fed balance sheet stopped growing in January 2020, demonstrating the dollar's dependence on balance sheet expansion that itself is structurally bearish for the currency.
[E9467] Since China's CNY oil contract launched in 2018, gold has outperformed long-dated USTs by nearly 60% and Chinese government bonds have outperformed long-dated USTs by 30%. Chinese government bonds increasingly trade like reserve currency issuer debt (yields falling during deflation) while Western sovereign bonds trade like emerging market debt with fiscal problems.
[E9483] China's gold-backed trade settlement system is actively undermining the petrodollar — China accepts oil payments in CNY, recycles into Chinese goods, with net surpluses settled in gold that floats in all currencies. This reduces foreign demand for USTs while US supply is exploding, reinforcing structural USD weakness.
[E9490] FFTT argues USD structural weakness is inevitable because US debt/GDP requires nominal growth above interest rates ('g > r') to avoid a debt spiral, making sustained USD strength mathematically impossible. Both Trump (tariffs, manufacturing reshoring) and Biden (rent caps, debt forgiveness) policies are inflationary, representing political convergence on debasement.
[E9491] J.D. Vance explicitly compares USD reserve currency status to 'coal in Appalachia' — a resource curse that subsidizes consumption while taxing domestic production and hollowing out the manufacturing base. His VP selection signals potential policy shifts toward neutral reserve assets and away from strong-dollar orthodoxy.
[E9505] FFTT argues China's PPP GDP is two to three times that of the US, implying the USD is significantly overvalued relative to the CNY. Peace forced by economic reality means this overvaluation will eventually be corrected, with bearish structural implications for the dollar.
[E9524] Gromen argues de-dollarization is accelerating through multiple channels: China-EU extended bilateral FX swaps for 3 years, China planned first EUR bond sale since 2004, Russia's Rosneft switched all export contracts to euros, and Rio Tinto signed first CNY iron ore contract. Multi-currency commodity pricing is becoming reality.
[E9525] Using the USD as a foreign policy weapon (sanctions) accelerates its replacement as reserve currency. Gromen quotes officials: 'The USD is very powerful & is a tool of US power. We'd rather enact sanctions than send soldiers. It makes us nervous when that is threatened.' This weaponization creates backlash driving de-dollarization.
[E9541] Scott Bessent described a potential Trump administration 'Mar-a-Lago Accord' targeting specific countries with phased tariffs to engineer a stronger yen/yuan and weaker dollar. Unlike the global Plaza Accord, this would involve bilateral currency negotiations. Implementation would require Treasury buybacks of long-term bonds to prevent market dysfunction during the USD weakening process.
[E9554] Gromen suggests potential G20 coordination to weaken USD following July 15-16 G20 meeting, which would benefit risk assets. Biden Administration political need for market rally before midterms creates dovish pressure that would weigh on dollar. Expects Fed pause to catalyze USD weakness.
[E9576] Luke Gromen argues the USD suffers from 'Dutch Disease' — acting as 'Saudi Arabia of money' with currency appreciation discouraging manufacturing exports, inflation in non-tradables, and over-production of debt. He contends US re-industrialization is impossible without ending reserve currency privilege, requiring structural USD devaluation. The Phase One trade deal's enforceable currency provision would put upward pressure on CNY and downward pressure on USD.
[E7988] The convergence of peak US shale production, Japan's failing capacity to finance US deficits, and accelerating de-dollarization through gold-backed trade settlement creates structural bearish pressure on the US dollar and its reserve currency status, as the monetary system transitions away from USD/Treasury collateral.
[E5766] Gromen argues it is a matter of US national security to keep the USD falling in an orderly fashion. Record speculator USD short positioning (-67% NIIP vs -40% in 2013) creates risk of a USD short squeeze if the Fed tapers. The optimal scenario is continued Fed purchases sufficient to prevent USD strength while allowing orderly decline.
[E8008] Gromen frames the USD Milkshake as unsustainable, noting heavy speculator long USD positioning creates potential for violent unwinding. Weak JPY driving higher US yields could trigger Treasury market dysfunction. The structural fiscal trap — interest expense exceeding defense spending — points to eventual forced currency devaluation as the only release valve.
[E5905] The Fed's inability to tighten meaningfully due to 130% debt/GDP, combined with the Standing Repo Facility maintaining liquidity through nominal taper, supports structural dollar weakness. The only palatable policy path is inflating away debt through negative real rates, which is inherently dollar-bearish over medium to long term.
[E5782] Russia converting USD oil/gas revenues to physical gold since 2014 represents a structural move away from dollar-denominated reserve assets by a major energy producer. Energy weaponization and the search for neutral reserve assets by producers undermine USD's role as the global reserve currency.
[E5790] Fed monetization of deficits creates structural pressure on the USD long-term. China borrowing in EUR for the first time in 15 years and Russia pricing oil in EUR signal accelerating de-dollarization, reducing structural demand for USTs as settlement instruments. The Fed's repo interventions neutralized widespread positioning for a Q4 2019 USD spike, demonstrating the dollar's vulnerability to policy accommodation.
[E8028] CNY now exceeds USD in China's bilateral trade for the first time at 49%. Argentina paying IMF debts in CNY creates a precedent, shifting the reference point from 'need USDs' to 'sell commodities to China for CNY.' US NIIP at -70% of GDP makes the US vulnerable if foreign capital repatriates.
[E5647] The structural inflation thesis implies dollar weakness as the Fed cannot meaningfully tighten and must allow negative real rates to persist. Debt at 130% of GDP forces financial repression, which structurally undermines dollar purchasing power. However, a China crisis could temporarily reverse this through safe-haven USD demand.
[E5630] Gromen argues the NASDAQ/EAFE ratio drives USD more than interest rate differentials. As capital flows out of overowned US equities, the dollar weakens structurally. This framework suggests USD weakness is driven by equity allocation shifts rather than rate policy, supporting hard assets like gold, Bitcoin, and commodities.
[E5695] Druckenmiller warned in May 2021 that pandemic recovery rotation from tech/growth to commodities/cyclicals would weaken USD as foreign capital flows that offset US deficits shift away from US tech stocks. Quote: 'the $500B outflow out of USTs was offset by massive inflow from global Central Banks, sovereign wealth funds, into our equity markets... the vaccine tends to cause rotation out of growth stocks into value stocks, and our big advantage over here are the growth stocks.'
[E5662] USD breaking down its traditional correlation with rising yields as capital flows eclipse interest rate differentials in FX determination. Foreign investors rotating from US tech stocks into commodities/cyclicals removes the key USD support mechanism that previously sterilized US deficits. DXY could fall to high 70s/low 80s from ~95 level based on twin US deficits of $3.77 trillion per Patrick Zweifel's analysis.
[E8062] The financial repression thesis implies real rates of -5% to -10%, with bond yields decoupled from inflation for 15+ years. Foreigners are buying fewer USTs, forcing more Fed QE. Combined with persistent broad money growth above 10%, these dynamics are structurally negative for the US dollar's purchasing power and real value.
[E8066] Saudi Arabia's consideration of accepting CNY for Chinese oil sales, occurring less than three weeks after Western sanctions froze Russian FX reserves in early March 2022, signals structural de-dollarization. Gromen argues Saudi can invest CNY in productive Chinese assets like refineries and nuclear plants rather than holding negative real yield US Treasuries, while the sanctions demonstrated dollar assets carry seizure risk.
[E5687] The balance of payments arithmetic shows the US dollar system is structurally vulnerable: the US would need gold at $24,454/oz to back the USD versus only $2,295/oz for Russia's ruble. A doom loop of higher USD is identified as unsustainable because it simultaneously drives higher yields and lower stocks, threatening US fiscal viability with government borrowing at 85% of global GDP growth.
[E8276] The ODNI is soliciting research on the USD losing reserve currency status. Chinese commodity futures volumes are exploding led by CNY oil contracts, and de-dollarization pressures are mounting. The Dollar Milkshake (USD strength) is self-limiting because the US government is the largest USD short — the Fed cannot allow a strong dollar to force cuts to entitlements, defense spending, or cause UST defaults.
[E8096] Gromen argues cross-currency basis swap improvement signals USD liquidity normalization, setting up sustained USD weakness. Germany's €1.1 trillion stimulus (30% of GDP) saw EUR rise after announcement, suggesting coordinated global central bank action per BlackRock's 'going direct' framework, which implies synchronized easing that structurally weakens the USD.
[E8106] Gromen notes the China trade deal's $200B purchase commitment requires a weaker USD to make US goods 'competitive in price,' while perpetual Fed balance sheet expansion and the historical parallel to Roosevelt's 40% dollar devaluation both point to structural dollar weakness. Continued fiscal expansion via proposed 'Tax Cuts 2.0' would further require Fed accommodation and dollar debasement.
[E8112] Luke Gromen notes the DXY index below 105 is falling faster than the 2017 cycle during Trump's first term, despite tariff threats that should strengthen the dollar. He attributes this to massive foreign capital outflows from US stocks dominating the USD-positive impact of tariffs, as foreigners repatriate capital to weather tariffs and front-run potential capital charges.
[E8501] US NIIP of -70% of GDP combined with the global private sector becoming the biggest marginal financier of US deficits means the US must keep USD moving steadily lower over time to prevent UST market dysfunction. Gromen argues there is an effective Fed/Treasury cap on USD strength, UST yields, and UST volatility in the interest of government financing.
[E8502] A strong USD creates a reflexive tightening spiral: dollar strength forces foreign UST selling, which tightens conditions further. This is identified as a critical risk that could overwhelm policy responses, reinforcing why policymakers must maintain structural USD weakness.
[E8124] Gold overtaking the euro as the second-largest global reserve asset at 20% share signals active de-dollarisation and monetary system transformation. Central bank gold purchases exceeding 1,000 tonnes annually for three consecutive years reflect institutional flight from USD-denominated reserves, driven by sanctions risk and desire to reduce USD dependence.
[E8164] Gromen's framework implies structural dollar weakness as $52 trillion in potential Chinese asset repatriation, Russia's gold-backed ruble currency war strategy, and the inevitable Fed pivot from tightening to accommodation all converge to undermine dollar strength. The dollar's gold backing would require $24,454/oz versus Russia's $2,295/oz, highlighting the dollar's structural vulnerability.
[E8174] US-China economic divorce forces Fed to expand balance sheet and/or slash rates to finance government and industrial reshoring as Chinese capital leaves US assets. CNY strengthening against USD despite massive Chinese stimulus signals capital repatriation dynamic. The petrodollar system is being replaced by gold-based settlement, structurally undermining dollar reserve demand.
[E8186] The US Treasury's 'economic Iron Curtain' threatening Chinese firms to choose between US/EU economies or supplying Russia with dual-use goods is accelerating de-dollarisation as creditor nations and commodity producers diversify away from USD reserves. Expanding EM-to-EM trade deals such as UAE-South Korea further reduce USD dependency in global commerce.
[E8207] Gromen notes USD weakness during risk-off episodes as early symptom of capital flight, a historically unusual pattern. Trade war with China (which has capital controls while US doesn't) makes US capital controls a 'mathematical inevitability.' USD structural weakness linked to foreign official sector no longer growing UST holdings and rising term premiums suggesting fiscal crisis pricing.
[E8219] Russia-China-UAE developing gold-settled energy trade systems to bypass USD and Western sanctions. UAE imported 75.7 tonnes of Russian gold in 2022 versus 1.3 tonnes in 2021, a 58x increase. Over 70% of China-Russia trade now settles in local currencies. This creates alternative financial infrastructure that structurally undermines dollar dominance in commodity trade.
[E8248] FFTT advises avoiding the USD given Fed deficit monetization and inflation risks. Central banks since 2013 have cumulatively reduced Treasury holdings by $8.8B while buying $154.1B in gold, suggesting systematic diversification away from dollar-denominated assets. The Fed's $60B monthly bill purchases represent structural dollar debasement.
[E5836] The work traces monetary history from gold standard to fiat currencies, arguing modern government money is inherently prone to debasement. Hyperinflation episodes in countries with failing monetary systems are identified as key adoption catalysts for Bitcoin, supporting the thesis that fiat currencies including the US dollar face structural long-term weakness.
[E5859] The inflationary liquidity injection from BTFP and potential Treasury buyback programs should pressure the dollar, according to Gromen. While safe haven flows could temporarily support USD, the structural direction of policy—monetizing Treasury market dysfunction through balance sheet expansion—is dollar-negative over time.
[E5868] De-dollarization is accelerating as China and other nations build alternative payment rails to circumvent the weaponized USD system. US fiscal constraints (7% deficit vs 3% sustainable per Buffett) require financial repression and negative real rates, structurally undermining the dollar. Swiss National Bank readiness for negative rates as capital controls signals broader trend.
[E8257] Gromen identifies USD debasement acceleration as a core thesis, arguing US fiscal math forces aggressive monetary accommodation and financial repression. CIPS payment system transactions rose 30% year-over-year, central banks are shifting reserves to gold/EUR/CNY, and China opened its first offshore gold delivery vault in Hong Kong to support yuan-denominated contracts.
[E5922] Gromen presents balance of payments arithmetic showing Russia would only need gold at $2,295/oz to back the ruble versus $24,454/oz needed for the USD, based on monetary base calculations. Higher energy costs are pushing Japan (JPY already breached 130 vs USD) and EU into balance of payments crises with currencies collapsing against the USD, potentially forcing these allies to abandon the US for Russian energy deals settled in gold.
[E5945] US insolvency ratio approaching levels that forced the 1985 Plaza Accord USD devaluation, with interest expense nearing 14% of tax revenues. Current US fiscal position far worse than 1980s: 120% debt/GDP vs 37% in 1984, running 8% deficits vs surpluses then, with massive foreign USD asset holdings that must be sold to defend local currencies — a complete reversal of 1980s capital flows.
[E5946] Japanese life insurers shifting to JGBs as yields rise and FX hedging costs increase for USTs. FX-hedged 10-year UST yields for Japanese buyers remain negative despite the Treasury sell-off. China faces capital outflows requiring UST sales. These foreign repatriation flows are increasing net Treasury supply and accelerating USD weakness dynamics.
[E5742] FFTT argues the US Net International Investment Position at -79% of GDP (vs positive 4-10% under Reagan/Baker during Plaza Accord) with foreigners net short $13T in USD debt makes tariff-driven USD strength systemically destabilizing. Base case is USD devaluation (or gold/Bitcoin revaluation) in 1H25 as a 'Sunday Night Surprise' to enable Trump's manufacturing reshoring goals.
[E5967] The US faces structural USD weakness because it runs twin deficits (fiscal and trade), has a negative 50% GDP Net International Investment Position, is externally funded, and is the world's biggest USD debtor (31% of total global government debt plus $100-200T in entitlement obligations). Forced Fed deficit monetization makes sustained negative real rates a national security imperative.
[E5968] Gromen argues the US cannot experience 'Japanification' because structural differences (twin deficits, negative NIIP, external funding dependence, must fund own defense, demographic diversity) are all opposite to Japan's situation, making an inflationary/USD-weakening outcome far more likely than deflation.
[E5981] Gromen frames orderly USD decline as a US national security imperative: the Fed must buy enough Treasuries to prevent USD strength while allowing gradual dollar weakening. Record speculator USD short positioning and US Net International Investment Position at -67% (vs -40% in 2013) make any taper-driven USD squeeze far more dangerous than the 2013 tantrum.
[E5998] Russia's strategy of converting USD energy revenues into physical gold since 2014, combined with US fiscal dominance (True Interest Expense >100% of tax receipts), structurally undermines dollar reserve status. Gromen frames neutral reserve assets (gold, Bitcoin) as beneficiaries of this weaponization dynamic.
[E6007] The Fed's September 2019 repo interventions neutralized widespread positioning for a Q4 2019 USD spike and risk-off trade. Gromen argues Fed balance sheet expansion structurally pressures the dollar long-term, as monetization leads people to see 'the writing on the wall' that central bank financing will eventually lead to inflation, triggering capital flight.
[E6041] The US fiscal position with True Interest Expense at 108-130% of receipts and inevitable Fed balance sheet expansion to finance the government implies structural dollar debasement. Gromen's conviction in gold and T-Bills over longer-duration assets reflects expectation that fiscal dominance will force inflationary monetary accommodation.
[E6050] The thesis implicitly supports dollar structural weakness by arguing fiat currencies including the US dollar are subject to political debasement through central bank discretion. Bitcoin is positioned as an escape from government monetary control, with adoption expected to accelerate as fiat currency crises intensify globally.
[E6069] Fed's BTFP inflationary liquidity injection should pressure the dollar structurally. While safe haven flows could temporarily support USD, the underlying policy of monetizing Treasury market dysfunction through balance sheet expansion is fundamentally dollar-negative and represents continuation of inflationary policy regime.
[E6078] Gromen argues de-dollarization is accelerating as China and other nations build alternative payment rails to avoid the weaponized USD system. Historical parallel drawn to 1453 when Ottoman Empire's tax increases on Silk Road trade forced Europeans to find alternative routes around Africa — similarly, US weaponization of financial rails may force creation of new global trade and monetary systems.
[E6104] Gromen identifies multiple structural USD bearish drivers: Fed forced to cut rates despite inflation, China expanding gold-based settlement infrastructure via Hong Kong, political polarization at 1860s Civil War levels threatening foreign capital flight from $62T gross/$27T net USD-denominated foreign assets, and China's agricultural boycott demonstrating reduced USD transaction demand.
[E6115] UK bought $120B in US Treasuries since March 2025 (110% of total foreign purchases) despite lacking 'steady' demand for its own 30-year gilts, suggesting coordinated allied support for US debt markets through tax havens rather than organic demand for dollar assets.
[E6123] South Korean official warned that without a currency swap, withdrawing $350B as the US demanded and investing it in the US would recreate South Korea's 1997 financial crisis conditions. Gromen uses this to illustrate how forced dollar demand is unsustainable and structurally damaging to allies.
[E6137] FFTT argues SLR rule suspension structurally weakens the dollar by allowing banks to shift from providing credit to 'the US government OR households/businesses' to 'the US government AND households/businesses,' creating structural USD liquidity increase. However, short-term USD strength risk exists if Fed/banks fail to buy enough Treasuries, which could trigger sharp USD surge and risk-off episode.
[E6150] Gromen argues the macro resolution requires the Fed and/or Treasury to weaken the USD significantly and soon, through ending QT, cutting rates, resuming QE, or UST buybacks. DXY strength above 105.50 is identified as a dysfunction threshold that triggers policy response, implying authorities will actively resist dollar strength.
[E6166] The analysis acknowledges USD reserve currency status may provide more policy space than historical comparisons suggest (counter-thesis), but the core thesis implies eventual dollar weakness: the Fed will be forced to resume QE into inflation, debasing the dollar. The 100% default rate for comparable fiscal profiles challenges dollar exceptionalism narratives.
[E6172] Multiple signals indicate transition away from USD dominance: Trump administration considering voiding Chinese debt holdings, Shanghai Gold Exchange boss calling for 'super-sovereign currency system under which no single country has the power to freeze international assets,' Saudi Arabia planning EUR-denominated bonds, and gold breaking out in SDR terms to levels not seen since 2005.
[E6173] The $57 trillion Eurodollar system may be beyond the Fed's capacity to backstop, creating a scale risk that threatens USD stability. The massive global USD short position forces the Fed into a lose-lose: print enough and debase the currency, or fail to print enough and trigger systemic market collapse.
[E6188] Gromen argues the US faces an 'Argentina-like outcome' where the fiscal and debt situation has far more in common with Argentina than the US of prior decades. Both fighting and accommodating inflation lead to USD/bond market crisis. The Fed's rate hikes inject fiscal stimulus via $300B+ interest payments, undermining the dollar's credibility while structural 5%+ deficits persist with $31T in outstanding debt.
[E6216] Gromen states the Fed/Treasury 'will ultimately do whatever they must to keep the US fiscal situation sustainable, which in this case requires a much weaker USD and sustained negative real US interest rates.' He views currency debasement as the inevitable policy response to fiscal unsustainability, paralleling Britain's experience during and after the breakdown of Free Trade 1.0.
[E6226] Strong dollar makes FX-hedged Treasury yields deeply negative for foreign investors: -1.14% for Europeans and -1.05% for Japanese as of late 2022. Foreign central banks have been net sellers of USTs since 2014, accelerating sharply. Gromen argues the Fed will ultimately sacrifice dollar stability to prevent Treasury market collapse, implying structural USD weakness ahead.
[E6239] Ray Dalio quoted: 'The Federal Reserve will have to print more money to make up for the deficit, have to monetize more and that'll cause a depreciation in the value of the dollar... You easily could have a 30 percent depreciation in the dollar through that period of time.' FFTT frames this as structural outcome of forced Fed QE to finance growing deficits.
[E6258] Gromen expects the consensus 'stronger USD' reaction to Trump's re-election will prove wrong. He argues Trump needs a 'much lower USD' to achieve his reshoring and fiscal agenda. DXY above 106 is identified as a stress threshold that historically triggers Treasury market dysfunction, reinforcing the structural bear dollar thesis. The contrarian view is that Trump's entire policy framework requires dollar weakness.
[E6268] Gromen argues 'never betting against America means USTs must lose on a real basis' — maintaining dollar strength is incompatible with sustainable debt management. The restructuring forces settlement in neutral reserve assets rather than dollar-denominated debt. A USD superspike risk exists from divergence between debt growth and foreign Treasury buying, but Gromen frames this as 'betting against America' and views dollar debasement as the intended policy outcome.
[E6281] The depletion of the Strategic Petroleum Reserve, which functioned as 'oil swap lines' helping allies and reducing UST selling pressure, removes the last dollar backstop. Once depleted, oil price spikes will accelerate foreign UST sales, undermining dollar reserve asset demand and forcing Fed monetization that further weakens the dollar.
[E6289] Luke Gromen argues USD weakening has begun following Biden-Xi San Francisco meeting on Nov 15, 2023, with USD breaking its 200-day moving average, CNY volatility collapsing to lowest since 2010, and CNY/USD rising sharply — a pattern similar to previous coordinated currency interventions. He frames this as potentially a 'San Francisco Accord.'
[E6290] Gromen warns that if USD strengthens instead of weakens, it triggers the 'Mother of All Crises' — a vicious cycle of higher rates, Treasury dysfunction, and systemic collapse. The only politically viable solution is significant USD devaluation to stabilize Treasury markets and prevent fiscal breakdown.
[E6303] FFTT argues Trump's tariff strategy represents a fundamental reversal of post-1971 USD reserve system flows, shifting from consumption-based imports to production-based domestic manufacturing. Bessent proposes 2.5% monthly tariff escalation up to 20% over 8 months. This 180-degree reversal of 50+ years of USD-centric monetary flows would unwind the Triffin Dilemma structure where the US runs trade deficits to supply global liquidity.
[E6330] The US fiscal position is unsustainable without significant USD weakening and above-target inflation. Gromen identifies a potential Trump victory as a catalyst for structural USD weakening arrangements. The system shows 'Soviet-like characteristics' and requires currency devaluation to manage debt dynamics with deficits never below 6% of GDP through 2034.
[E6340] Current USD dynamics differ from prior 'USD hatred' episodes (2004-2008, 2009-2013) because US Net International Investment Position is now -70% of GDP versus -8% to -40% previously. This means foreigners holding massive USD assets will 'sell USTs till their hands bleed' to raise dollars during stress, accelerating dysfunction and structural dollar weakness.
[E6341] Iraq is implementing 'oil for gold' reserve diversification, buying gold at attractive price levels while trading with China in yuan. This reflects a broader shift by oil exporters away from USD-denominated reserves toward hard assets, contributing to structural de-dollarization pressure.
[E6354] The US government is selling USTs to buy commodities and strategic assets (10% Trilogy Metals, 15% MP Materials, Argentina $20B aid package), which FFTT interprets as the US government effectively shorting USDs. Gromen states the post-1971 structure of USD reserve status whereby USTs are the primary reserve asset is 'over' based on the US government's own actions.
[E6380] The $400B China-Iran strategic energy partnership allows China to purchase oil, gas and petrochemicals at up to 32% discount using CNY and non-USD 'soft currencies,' bypassing the dollar entirely. Given China's $700B trade surplus, Gromen argues this makes it 'basically impossible for China to ever experience a USD shortage,' representing a 'mortal wound' to USD dominance.
[E6381] US ISM New Export Orders collapsed to 43.3, the lowest since 2008-09, while China's exports grew 3.3% YoY. Gromen argues the strong USD at DXY 98 is making US exports uncompetitive, warning that if DXY rises to 110-120 as some bulls predict, US exports could collapse further and trigger a sharp recession.
[E6396] US-Japan-Korea trilateral FX consultations and Yellen's urgent trip to Beijing two weeks before the IMF Spring meetings signal coordinated policy response to USD strength. Gromen interprets the urgency — a 77-year-old Yellen flying to Beijing despite the imminent IMF meeting in Washington — as evidence the discussions were 'VERY important and VERY acute,' pointing to imminent USD weakening intervention.
[E6397] Gromen expects coordinated USD liquidity intervention to weaken the dollar following the IMF Spring meetings, citing historical pattern of USD weakness post-IMF gatherings. The combination of MOVE Index stress, foreign UST selling, and coordinated FX discussions all point to a structural USD weakening event.
[E6406] China's FX reserves as % of GDP fell from 47% to 18% between 2010-2021 despite massive commodity import increases, evidencing structural de-dollarization. Russia now sells commodities including nickel to China in CNY, and China's sovereign wealth fund holds 60% in yuan, reducing global USD demand structurally.
[E6407] China is building a gold-backed CNY commodity settlement system. PBOC statements indicate 'increasing FX reserves no longer serves China's interests' and that 'the gold market and SGEI are vital to the internationalization of CNY…we would like to increase usage of CNY in trade invoicing by using gold.'
[E6423] Gromen argues Trump's tariff proposals would fundamentally restructure post-1971 USD reserve status by reducing USD/UST exports while maintaining USD reserve currency dominance. This requires 'free market adjustment' of USD value downward and a shift to alternative reserve assets for net settlement, structurally bearish for the dollar.
[E6439] The Fed's only viable path out of the deficit/GDP mismatch is renewed monetization, which would be structurally bearish for the dollar. Central bank gold purchases of $260B versus $209B UST sales since 2014 reflect a global reserve diversification away from USD assets. However, continued USD appreciation in the near term could break the global economy before the Fed pivots.
[E6458] Gromen's framework of structural Fed balance sheet expansion via the Standing Repo Facility to finance fiscal deficits, combined with the transition to emerging market-style dynamics where SPX is down 20% in gold terms, implies continued dollar debasement. The 'Red Queen problem' of ever-increasing refinancing needs ensures persistent liquidity creation that undermines dollar purchasing power.
[E6467] Trump's 'Fair and Reciprocal Plan' mandates the end of the post-1971 trade structure as a national security imperative, signaling a structural USD decline. Gromen argues that without prior USD devaluation, DOGE spending cuts of $1T+ could reduce US GDP by 4-10%, forcing the devaluation path.
[E6468] Gromen argues US economic exceptionalism was driven by 'out-frauding' other nations via fraudulent helicopter money saturating the services economy, not genuine productivity. Cutting this fraud via DOGE without prior USD devaluation would reveal 'no US exceptionalism' and trigger a fiscal crisis.
[E6480] BRICS nations holding net USD asset positions can sell these assets when needed, creating structural selling pressure on USD-denominated assets. Combined with fiscal dominance dynamics where both rate hikes and cuts drive inflation, the dollar faces a structural headwind as the Fed is eventually forced into QE or YCC capitulation to prevent bond market dysfunction.
[E6494] As oil gets more expensive and emerging markets consume more energy, they must spend down USD reserves to buy oil, mathematically guaranteeing a late-1990s Asia crisis scenario unless they can price commodities in their own currencies. This dynamic accelerates de-dollarization as a survival mechanism for EM nations.
[E6495] The Achilles Heel of the USD-centric system is the unallocated gold markets centered in London. China and Russia are exploiting this vulnerability by supporting CNY-denominated energy trade and redirecting physical gold flows eastward, undermining the financial architecture underpinning dollar hegemony.
[E6510] Gromen's framework implies structural dollar weakness as the US must debase its currency to reduce debt/GDP from 130% to ~80%. The NIIP at -65% of GDP creates a vulnerability where foreign selling during tightening could break markets, forcing the Fed to resume accommodation and further weakening the dollar's purchasing power.
[E6518] US net international investment position at -55% of GDP (worst entering any recession in history) creates a pro-cyclical doom loop: $12T of USD assets held by foreigners could be sold, forcing USD strength that triggers more asset sales, requiring unlimited Fed intervention. Gromen views Bernanke's final deflation-fighting tool as explicit USD devaluation against gold.
[E6538] Escalating US-China tensions and fiscal dominance accelerate de-dollarization trends. Foreign selling pressure on USTs threatens auction failures, while rising deficits and forced Fed liquidity provision undermine dollar credibility. Geopolitical conflict drives demand for alternative stores of value away from dollar-denominated assets.
[E6547] Kenyan Treasury Secretary stated 'the moment we move from US dollar to renminbi, automatically the interest rate reduces by almost half.' China converting USD-denominated foreign debt to yuan debt at half the interest cost and offering 260bps cheaper financing than comparable UST yields to neutralize weaponized USD swap lines, directly undermining dollar hegemony in sovereign lending.
[E6562] Dalio's case studies show currency devaluation as a key recovery catalyst, with real FX declines restoring competitiveness in crisis cases. The framework divides the world into debtors and creditors with independent vs. linked monetary policies, noting that debtors who can print money and devalue currencies recover faster. This supports the structural dollar bear thesis as the US, a major debtor nation, would need significant currency devaluation in any future deleveraging.
[E6591] US-China decoupling, collapsing entitlement Ponzi schemes, and the flight from debt-based fiat systems collectively undermine the dollar's structural position. China's rare earth dominance and the US inability to rebuild supply chains within 15 years reinforce dollar weakness as the US loses leverage in great power competition.
[E6600] Russia's $4 billion monthly gold purchases are accelerating de-dollarization. Fed's mathematical inability to raise rates due to 130% debt-to-GDP ratio traps the dollar in a structurally weak position. The inflationary solution required for debt sustainability implies sustained dollar debasement over an extended period.
[E6607] JPMorgan estimates 20% of global oil now trades outside the USD, up dramatically from ~2% in 2015-2021. Gromen argues this makes de-dollarization irreversible, asking 'Why would China, Iran, and Russia ever trade for USD now that the Pandora's Box of US sanctions on USTs was opened?' US debt/GDP at 120% vs 30% in 1970s means the Fed cannot defend USD through rate hikes like Volcker did.
[E6622] Gromen argues the Trump administration's solution involves currency devaluation for industrial reshoring while maintaining USD systemic dominance through stablecoins and neutral reserve assets. Central banks stopped buying USTs and started buying gold since 2014, forcing real rates higher and undermining the post-1922 Genoa Conference system that treated USD reserves as equivalent to gold.
[E6643] China and Russia are net settling bilateral trade in gold and silver rather than dollars, with Russia's precious metal exports to China rising 80% y/y. This gold-based trade settlement mechanism bypasses Western financial systems and supports the structural dollar bear thesis through de-dollarization of commodity trade.
[E6661] Gromen argues dollar devaluation is inevitable as fiscal desperation forces accommodation. The US cannot achieve deficit targets without politically impossible entitlement cuts, making financial repression and currency debasement the path of least resistance. China's rare earth leverage further undermines the dollar's reserve currency backing by exposing US military projection weakness.
[E6671] Gromen argues the US is 'running our economy like we're not interested in maintaining global reserve currency status.' Geopolitical shifts — Saudi-Russia military cooperation, Brazil doubling gold reserves while trading iron ore in CNY with China, and US oil imports from Saudi dropping to 97,000 barrels/day — signal accelerating movement away from petrodollar arrangements and USD-centric settlement systems.
[E6686] De-dollarization accelerating as countries like Bolivia and Ghana use gold settlement to reduce USD demand for energy imports. China information blackout and rising tensions add geopolitical pressure. However, Gromen acknowledges counter-thesis that global USD shortage could temporarily strengthen the dollar despite structural de-dollarization trends.
[E6699] Gromen argues USD weakness is structurally inevitable because the Fed must choose dollar depreciation over Treasury market dysfunction. With $7.6T in foreign Treasury holdings and $13T offshore USD debt, rising USD strength forces global intervention selling of Treasuries, creating a feedback loop that ultimately compels the Fed to weaken the dollar to preserve financial stability.
[E6700] Rising USD strength is already forcing global central bank intervention as of January 2024. The structural policy path dependency means the Fed will ultimately prioritize USD weakness over maintaining high real rates, given the impossibility of sustaining 2% real rates without triggering fiscal dominance on the existing US government debt stock.
[E6720] Ukraine peace outcome interpreted as formal recognition of China/Russia monetary system victory, supporting shift to multi-currency energy pricing with gold settlement. Deflationary crisis may strengthen USD initially before forcing nuclear-level intervention, but the structural trajectory points toward dollar debasement through YCC-financed industrial policy.
[E6737] US structural position with 130% debt/GDP, -62% net international investment position, and $3T deficit creates structural headwinds for the dollar. China's investment in productivity tools to offset shrinking population versus US reliance on deficit-financed spending could structurally favor CNY over USD long-term.
[E6753] Systematic USD weakness is identified as the most likely resolution path for the US fiscal crisis. A weaker USD is needed to stabilize Treasury markets and boost tax receipts via stock price gains. BOJ potential hawkish tilt could accelerate USD weakness vs JPY.
[E6770] China's shift of its ~$700B annual commodity import bill from USD to CNY would effectively increase China's current account surplus by that amount, reducing structural USD demand significantly. Ray Dalio expects currency devaluation rather than traditional debt crisis as the release valve, stating 'the way it will be done is by printing and devaluating the currency.'
[E6783] Putin announced BRICS are developing a commodity-basket based reserve currency similar to Keynes' 'Bancor' proposal. The IMF reports global currency reserves at $7.1 trillion and €2.5 trillion, devaluing at ~8% annually and subject to confiscation risk (citing Russia sanctions), driving energy exporters and importers to seek alternatives to UST surpluses.
[E6799] US debt fundamentally unsustainable at 120% GDP with only 9% tax receipt collateralization vs 40% in 1980. BRICS gold-energy settlement mechanism would force USD to compete on merits. Goehring and Rozencwajg note 'every other commodity bear market ended with a shift in the global monetary system and a devaluation in the dollar that stimulated resources.'
[E6811] The strong dollar policy risks triggering cascading sovereign defaults globally and is unsustainable given record US deficits and collapsing foreign Treasury demand. The combination of fiscal dynamics forces the Fed into eventual accommodation, which would structurally weaken the dollar.
[E6819] Gromen posits that both the US and China benefit from coordinated USD weakness following Treasury-China talks in Beijing. The US needs weaker USD to support the UST market, stock market, and tax receipts given fiscal pressures, while China needs it to reduce economic pressure. A weaker USD would help drive US stocks up, bolster tax receipts, reduce UST issuance, and support Biden's re-election chances.
[E6833] Credible reports suggest China can buy Saudi oil in either CNY or USD, which Gromen interprets as positive for gold especially relative to oil, positive for volatility, and a step in de-dollarization. The structural absence of foreign central bank UST buying since 2014 reinforces the dollar's weakening foundation.
[E6844] The Fed's attempt to run a 'Soros Imperial Dollar Cycle' is backfiring because conditions differ fundamentally from 1984: US debt/GDP is 120% vs 37%, deficit is 8% vs 4.5% of GDP, NIIP is -65% vs +3.5%, and oil can now be priced in non-USD currencies. Strong USD forces foreigners to sell $18T in USD assets to service $13T in USD debt, creating a 180-degree reversal of capital flows.
[E6845] Foreign demand for USTs is evaporating, with emerging market bond yields falling below US Treasuries for the first time on record. Continued USD strength could accelerate foreign asset sales as dollar strength forces foreigners to liquidate $18T in USD assets, creating a self-reinforcing funding crisis for US debt markets.
[E6860] Druckenmiller is quoted warning 'We're in a raging mania' and that the 'Fed is endangering USD reserve status.' Combined with foreigners selling rather than buying USTs during the 2020 crisis, Gromen sees structural deterioration in the dollar's reserve currency foundations.
[E6874] FFTT argues orderly USD weakening is necessary to prevent UST market dysfunction and address trade competitiveness with China. Draws parallel to the 1985 Plaza Accord that weakened the dollar 50%+ against the yen, suggesting a similar China-focused currency revaluation is a key catalyst.
[E6875] India paying for oil in rupees while INR rises against USD but falls against gold signals de-dollarization in energy trade. Increasing non-USD energy trade settlement, particularly in BRICS transactions, supports the structural dollar bear thesis.
[E6888] Gromen presents a structural dollar bear case: fiscal mathematics force USD weakening as True Interest Expense approaches 100% of receipts, compelling Fed accommodation. Simultaneously, China accelerates de-dollarization by conducting majority of developing-country lending in CNY rather than USD, using CNY swaps and commodity pricing to shift trading partners' reserves from USD to CNY. Both monetary and structural demand dynamics pressure the dollar lower.
[E6920] Analysis concludes USD devaluation is the only mathematically viable path forward given fiscal unsustainability. CIPS transaction volumes up 40% YoY to $4.8T challenge SWIFT dominance and reduce US financial system leverage. Combined with Peak Cheap Oil dynamics and structural deficits, this supports a structural USD bear case.
[E6939] Gromen argues Trump ultimately needs and will get a much weaker USD to resolve the debt crisis, requiring devaluation of US debt/GDP from 125% to 70-80% before cutting spending. The correct order of operations is debt restructuring/USD devaluation first, then spending cuts. Failure to follow this sequence would trigger '2022 on steroids' — USD up, everything else down.
[E6953] Dalio's historical template shows that successful 'beautiful deleveraging' typically requires approximately 50% currency devaluation versus gold in the initial adjustment phase. Countries with reserve currency status have more flexibility to monetize domestic-currency debt, but the framework implies significant currency depreciation is a feature, not a bug, of proper debt crisis management.
[E6972] Gromen identifies USD collapse risk as a critical factor: a weakening dollar could accelerate foreign UST selling, compounding Treasury market fragility. The shift in marginal UST buyers from central banks to speculative hedge fund entities in Cayman Islands and UK suggests declining strategic foreign demand for dollar assets.
[E6985] BRICS de-dollarization accelerates as countries avoid accumulating unwanted foreign currency balances. The proposed US sovereign wealth fund is characterized as a 'leveraged carry trade' that effectively shorts the dollar to buy dollar assets, since the US runs current account deficits and must borrow to fund it. The fiscal dynamics described force dollar-debasing policies.
[E6995] Gromen argues structural dollar debasement is underway as Fed independence is compromised by subordination to fiscal financing needs. Fed liquidity injection to finance deficits will be negative for the USD long-term. The USD funding squeeze paradoxically strengthens the dollar short-term but the forced monetization response undermines it structurally.
[E7012] USD may strengthen initially from Fed policy error tightening, but Gromen argues the forced reversal will trigger structural dollar weakness. Declining foreign demand for US Treasuries and eroding Treasury market liquidity undermine the dollar's structural foundation, with eventual accommodation benefiting gold, BTC, commodities, and real assets.
[E7020] Gromen argues the Standing Repo Facility is USD negative over time as it reveals fiscal strains and insufficient foreign demand for Treasuries. He warns that Biden administration considering weaponizing the dollar against China would be a 'galactically bad idea' causing global financial disruption, and that such a policy is nearly impossible given Treasury market fragility.
[E7030] Gromen argues USD devaluation is a mathematical certainty given US debt at 125% of GDP and $13T in foreign USD debt. Every time federal receipts exceed 18% of GDP, a recession has followed without exception. Neither tax hikes nor austerity are viable — the only option that avoids a 'USD up, everything else down' debt spiral is to first devalue the USD or significantly reduce debt/GDP.
[E7042] Gromen argues the rapidly deteriorating US fiscal situation requires a much weaker USD to remain manageable. Historical pattern shows major job cut announcement spikes (+440% YoY, highest since 2008) precede sustained DXY declines lasting 1+ years. Yellen's October 2022 pivot led to 11% DXY decline over three months, signaling fiscal stability now dominates over inflation control.
[E7064] Expensive USD hedging costs for foreign private investors are cited as one of four structural impediments preventing sustainable Treasury market funding, implying the dollar's strength is paradoxically undermining the government's ability to finance deficits and will ultimately force policy responses that weaken the dollar.
[E7071] Asian currencies (JPY, CNY) fallen to 10-month lows, forcing oil-importing creditors to sell USD assets including Treasuries to raise dollars for currency defense and energy purchases. This dynamic creates a self-reinforcing cycle that ultimately undermines USD asset values and forces Fed intervention that is structurally bearish for the dollar's purchasing power.
[E7103] US structural weaknesses — -70% NIIP, twin deficits, externally-funded debt at 125% of GDP, and insufficient external financing — mean the Fed cannot sustain hawkish policy. Emerging market stress could force foreign USD asset sales, further pressuring the dollar as the Fed is ultimately forced to accommodate negative real rates.
[E7113] Gromen identifies a correlation break between JPY/USD and 10-year UST yields, suggesting Japan may be buying energy in JPY rather than USD — a sign of de-dollarization in energy trade. Fed balance sheet expansion and weaker USD are expected catalysts over 3-6 months. Long-term thesis points to complete restructuring away from USD-centric reserve system, with BRICS+ gold settlement as an alternative mechanism.
[E7123] 74% of central banks surveyed expect lower USD reserves over the next 5 years, while cumulative central bank gold purchases exceed $800B since 2014 vs net UST sales. Both JPY strength and USD weakness are now driving higher sovereign yields rather than lower, suggesting structural de-dollarisation pressures are intensifying.
[E7140] Gromen warns that massive Fed money printing to prevent systemic collapse risks triggering loss of reserve currency status. China's DCEP digital currency launch enables complete bypass of the dollar system. Gen. Qiao Liang's quote frames the existential threat: 'Will the empire that is established on currency still exist?' when trade no longer requires traditional currency.
[E7167] Gromen identifies a developing balance of payments crisis where stronger USD creates a self-reinforcing negative cycle. Cites the BIS warning that 'there may be no winners from a stronger USD.' Dollar strength creates global stress that ultimately forces Fed reversal, implying the dollar's strength is self-defeating and will give way to structural weakness once the Fed capitulates.
[E7179] China is urging state enterprises to use CNY payments and building gold-backed CNY settlement infrastructure internationally, accelerating de-dollarization. The establishment of Shanghai Gold Exchange overseas warehouses enables CNY internationalization through gold-backed trade settlement, positioning CNY as an alternative to USD in global commerce.
[E7196] Perkins warns that dollar hegemony faces serious challenge as countries adopt yuan-denominated trade agreements. China's 'third EHM wave' through the New Silk Road has captured global influence by offering infrastructure partnerships rather than debt-trap diplomacy, creating alternative economic dependency structures that bypass dollar-denominated institutions like the World Bank and IMF.
[E7216] China has displaced the US as the world's dominant trading partner and biggest oil importer in just 19 years since joining the WTO. China-Arab trade reached $240B in 2020, making China the largest Arab trading partner. Gromen argues this shift fundamentally undermines the USD's reserve currency utility and makes the current USD-centric system a national security threat requiring a shift to neutral reserve assets.
[E7226] FFTT contends the Fed will be mathematically forced to monetize US deficits, weakening the USD. Hauser's Law shows US tax receipts stay at ~19.5% of GDP over 80 years regardless of rates, making tax increases futile. The only release valves are a productivity miracle or USD devaluation via Fed financing of fiscal deficits, directly or by proxy.
[E7237] USD reserve currency status faces structural erosion as foreign UST demand declines. Japanese buyers retreating due to hedging costs making UST purchases uneconomical. Yellen publicly pleaded to avoid a 'bipolar financial system,' suggesting US officials recognize the systemic threat to dollar dominance. Russian sanctions and energy-gold linkage accelerate de-dollarization process.
[E7252] Japan's $1.5T GPIF pension fund holds 50% in foreign assets (mostly USD) but faces negative hedged yields of -2.3% on USTs. GPIF is reviewing its strategy and could potentially sell up to $750B in USD assets, requiring Fed FIMA facility liquidity provision to prevent UST market disruption during repatriation.
[E7268] Structural USD debasement is viewed as the inevitable policy choice as UST market dysfunction forces massive liquidity injections. China's declining FX reserves (50% to 20% of GDP) and shift to CNY-denominated oil purchases reduce structural foreign demand for USD assets, while rising US deficits require ever-larger buyer pools, creating a fundamentally bearish USD setup.
[E7278] Gromen argues Yellen's plan to drive DXY to 110+ will catastrophically backfire because structural conditions differ from her successful 2012-2013 playbook: US debt/GDP now 125% vs 98%, foreign central bank UST purchases down to 5% from 50%+, and emerging Treasury market stress. A heavily-indebted twin deficit economy approaching recession with simultaneous equity and bond selloffs signals a balance of payments crisis that undermines the strong dollar policy.
[E7291] Gromen presents a structurally bearish USD thesis driven by fiscal dominance: the Fed must cut rates and slow QT to reduce $2.2T annualized deficits, weakening the dollar. The 'San Francisco Accord' theory suggests US-China may have agreed to coordinate USD weakening post Biden-Xi meeting, potentially allowing China to buy Saudi oil in CNY. BRICS coordination threatens US oil market share further.
[E7300] Ghana's planned Q1 2023 gold-for-oil policy implementation signals broader de-dollarization. If major oil producers accept gold at above-market ratios, countries can bypass USD for energy imports, freeing up dollars for debt service and fundamentally altering balance of payments dynamics. However, continued USD appreciation could delay this de-dollarization timeline.
[E7315] The coordinated fiscal-monetary regime where the Fed provides unlimited liquidity via Standing Repo Facilities to finance government deficits at negative real rates is structurally bearish for the US dollar. The 'fake QE taper' maintains elevated USD liquidity while $100-150 trillion in climate spending commitments and supply chain inflation further undermine the dollar's purchasing power over time.
[E7328] Gromen argues Treasury's choice to issue T-Bills despite an inverted curve represents emerging-market-style behavior — prioritizing bond market function over cost efficiency — which signals choosing to 'hurt the USD' rather than damage the bond market and real economy. This constitutes an admission of inevitable USD debasement to manage the debt burden, a hallmark of fiscal dominance.
[E7339] Gromen predicts extended negative real rates and USD debasement as the only viable resolution to the US debt crisis. Historical precedent cited: FDR devalued USD 75% against gold in 1933; post-2008 Fed expanded balance sheet 5x and gold rose 3x. Political reality ensures government will use all powers to fund itself through currency debasement rather than default.
[E7360] FFTT argues USD must weaken further to maintain foreign Treasury demand amid $932B Q1 issuance. Challenges the 'Big Flip' thesis of sustained USD strength, contending that fiscal dominance now subordinates Fed policy. If USD strengthens too much, it triggers UST market dysfunction — the fourth such episode in three years — forcing accommodation regardless of inflation.
[E7391] Gromen argues the Fed will always choose to prop up the banking system over defending the dollar when forced to decide. Fiscal dominance at 120% debt/GDP with 7-8% deficits creates an inevitable path to dollar debasement through inflation taxation, as every crisis response makes the next inflation wave worse in a structural feedback loop.
[E7406] China's digital yuan launch post-2022 Winter Olympics could accelerate USD displacement in trade settlement. BIS Project Jura demonstrated wholesale CBDCs can settle cross-border trades outside the USD system. As China is the world's largest exporter, this could reduce global USD demand, though it might paradoxically strengthen USD initially by reducing Treasury demand.
[E7419] The Fed's 23% annualized balance sheet growth rate and over $3 trillion in repo operations in two months represent significant dollar supply expansion. Gromen implies the Fed will continue expanding at whatever rate needed, which structurally undermines dollar purchasing power over time as monetary base expands to fund US government deficits.
[E7429] Unlimited Fed monetization of unprecedented deficits (~$4T), SLR exemption enabling infinite bank leverage on Treasuries, and potential need to absorb the $57 trillion Eurodollar system all point to structural dollar debasement. Assets should rise in local currency terms while potentially falling in gold terms, consistent with a structurally bearish dollar thesis.
[E7462] PBOC Chief Pan Gongsheng explicitly outlined a multi-currency global order to replace USD dominance, stating the global monetary system could evolve toward 'a few sovereign currencies co-exist, compete and check and balance each other.' China's CIPS payment system transactions are up 30% y/y, and China's $1 trillion trade surplus is being settled in gold, demonstrating a functioning alternative to the USD system.
[E7477] Russia and China are actively moving away from USD-denominated energy trade, with new 30-year gas deals settled in EUR rather than USD and broader discussions about trading in national currencies due to 'unpredictability in dollar trade.' This multi-currency energy settlement trend threatens the USD's monopoly in oil markets and undermines dollar hegemony.
[E7490] Japan's $3.2 trillion positive NIIP provides a 'third option' beyond saving bonds or currency: repatriating trillions in USD assets back to Japan. This would involve selling US Treasury and dollar assets for yen, effectively 'drinking the US milkshake' and creating structural selling pressure on USD assets. Gromen expects Japanese asset repatriation to accelerate in 2023.
[E7491] Converging forces of mechanical CPI decline enabling Fed pause, Japanese repatriation of USD assets, and China's commodity encumbrance all signal accelerating de-dollarization and structural USD headwinds. Gromen is explicitly bearish USD, arguing conditions are similar to the Fed raising its inflation target from 2% to 4-5%.
[E7502] Gromen argues Treasury's choice to issue T-Bills (at higher rates on shorter duration) rather than risk long-end bond market dysfunction represents emerging-market-style behavior — deliberately choosing to 'hurt the USD' rather than damage the bond market and real economy. This signals inevitable USD debasement to manage the debt burden, constituting fiscal dominance acceleration.
[E7514] Gold's share of global FX reserves jumped to 24% in Q1 2025, reflecting accelerating de-dollarization. China's expanding yuan payment systems, Trump's unprecedented Fed intervention, and stablecoin promotion all point toward a fundamental shift away from the current USD-centric monetary system.
[E7531] BRICS local currency settlement expansion via mBridge and gold backing identified as key catalyst. CIPS volumes growing as sanctions create an 'Economic Iron Curtain' driving trade to alternative payment systems. Emerging markets gaining ability to print local currency for energy imports rather than needing USD, structurally undermining dollar demand.
[E7555] FFTT argues USD devaluation is inevitable: defense industrial base constraints and geopolitical pressures will drive aggressive deficit-financed industrial policy. States 'a large USD devaluation would do more than a sprinkling of industrial subsidies' to restore US industrial competitiveness. Potential mechanisms include gold revaluation or sanctioning foreign FX reserves.
[E7567] Foreign creditors including China, Saudi Arabia, and Europe reducing UST purchases forces Fed monetization. Combined with Fed's structural inability to tighten (debt/GDP 125%, True Interest Expense exceeding tax receipts), the dollar faces persistent debasement pressure. An energy-induced recession would further suppress tax receipts, accelerating the dynamic.
[E7573] FFTT contends the post-1971 USD reserve system is ending, driven by multi-currency commodity pricing emergence, potential NATO loss in Ukraine undermining military backing of USD reserve status, and US-China economic divorce accelerating foreign selling of USD assets. The international trade value of USD faces structural pressure from non-USD commodity pricing with gold settlement.
[E7590] Repatriating manufacturing supply chains from China requires either significant USD weakening or continued massive Fed deficit monetization. The US runs a $275B trade deficit vs China compared to Japan's $28B surplus, making supply chain restructuring without dollar depreciation extremely difficult. Both paths — weaker dollar or continued monetization — are structurally bearish for USD purchasing power.
[E7598] Gromen argues USD devaluation is the only politically palatable solution to restore foreign demand for USTs and improve US competitiveness. He states 'The US cannot have both capital controls AND the world's reserve currency as the USD is structured, only one or the other,' implying that attempts to restrict capital flows would accelerate dollar decline.
[E7609] US non-financial corporates are short $4.8T in USDs versus China and other EMs being short a total of $3.2T — US multinationals are 50% more leveraged than all emerging markets combined. German fiscal stimulus could trigger EUR/USD unwinding, forcing UST yields higher. Fed helicopter money implementation could trigger severe currency debasement.
[E7646] Gromen argues the analysis points to a coming transition from the USD-centric reserve system to gold/BTC-based neutral reserve assets. China's record $1T trade surplus highlights the unsustainability of current dollar-based arrangements, with Trump trade advisor Navarro noting the US is 'transferring $1 trillion of US assets abroad every year due to trade deficit.'
[E7660] BOE Governor Carney's August 2019 Jackson Hole speech called for a Libra-like neutral digital reserve currency to replace the dollar, stating 'the dollar's position as the world's reserve currency must end.' Gromen interprets this as coordinated movement toward a neutral reserve asset system signaling structural dollar decline.
[E7661] US inability to relocate supply chains from China — where seven of the world's ten busiest ports are located — forces a 'Plan B' of USD debasement rather than successful supply chain relocation, as building equivalent trade infrastructure takes decades. 'Logistics > tactics' makes trade war resolution impossible.
[E7668] Luke Gromen argues a coordinated USD devaluation was agreed at October 2022 IMF meetings in Washington. DXY fell at a 44% annualized rate since peaking October 13, 2022. Evidence includes Yellen's 24-hour reversal on Treasury market concerns, Treasury General Account drawdown, surprise BoJ/ECB tightening strengthening JPY/EUR, and China reopening — all appearing coordinated to weaken USD.
[E7669] Gromen identifies the US debt/DXY ratio hitting critical levels in October 2022, matching previous turning points in June 1971, April 1985, March 2002, and February 2020 — all of which marked major USD weakness periods. This technical signal reinforces the fundamental case for structural USD devaluation from current levels.
[E7686] China's ability to successfully defend CNY at 7.30/USD by selling just $30B in USTs while causing 80bp yield spikes demonstrates US vulnerability in currency conflict. With $4T in reserves, China's currency defense mechanism structurally undermines US fiscal position, supporting the dollar structural bear thesis through bond market stress transmission.
[E7703] Rising DXY creates a dangerous feedback loop that could trigger foreign USD debt deleveraging cascade, reinforcing the thesis that current USD strength is unsustainable and ultimately self-defeating for the Treasury funding mechanism.
[E7701] VP Vance explicitly described USD reserve currency status as a 'resource curse' causing Dutch Disease. Trump's trade deals mandate creditor nations invest in US factories rather than capital markets, signaling a deliberate pivot away from traditional USD reserve structure and toward structural USD devaluation.
[E7702] Gromen argues the US is orchestrating systemic devaluation of USD against a neutral reserve asset (BTC) through stablecoin expansion, redirecting global trade flows away from traditional Treasury recycling to address fiscal constraints and USD Dutch Disease.
[E8282] Gromen argues Trump's tariff announcement (54% on Chinese goods, highest in 100+ years) may be the 'Nixon Sunday Night Surprise' moment ending the post-1971 USD reserve currency structure. With US debt/GDP at 120% and deficits at 7%, the US lacks manufacturing capacity and leverage to execute this strategy, potentially triggering a structural decline in the dollar's reserve status.
[E8295] Record USD bullish sentiment has developed a 'cult-like following' among retail traders comparable to GameStop/AMC mania. Institutional positioning is max-long USD with risk-off sentiment matching major market lows. Gromen argues this extreme positioning creates conditions for a sharp counter-rally if the Fed pauses or coordinates G20 USD intervention to support EUR/JPY.
[E8310] FFTT warns that Saudi Arabia declaring energy sales in CNY, EUR, and JPY with gold settlement would permanently reduce foreign central bank demand for USTs while bidding up gold. This is viewed as more threatening to dollar hegemony than Saudi selling their $120B in Treasury holdings directly.
[E8321] Gromen argues the Fed being cornered into balance sheet expansion is structurally negative for the USD longer-term. Commodity de-dollarization—with China pricing more imports (iron ore, oil, copper, gold) in CNY—reduces structural foreign demand for US Treasuries, forcing the Fed to become the marginal buyer and further weakening the dollar's reserve currency underpinnings.
[E8350] The doom loop Gromen describes—where Japan's forced yen debasement reduces UST demand, driving US yields higher and eventually forcing the Fed into YCC—implies massive dollar debasement as the endpoint. The Fed will be forced to monetize debt, with 2-4 years of 20%+ CPI inflation globally. JPY weakness is the leading indicator of broader fiat currency debasement dynamics.
[E8361] Gromen argues the Fed's hawkish pivot has pushed USD to unsustainably strong levels, recreating the 2022-2023 'USD up, everything else down' regime. With US true interest expense at 103% of receipts and debt/GDP at 125%, the mathematical impossibility of servicing this debt with rising rates forces eventual USD devaluation. Foreign holders of $57T in USD assets face pressure to sell USTs to service $13T in USD-denominated debt, creating an accelerating debt spiral.
[E8380] The $80 trillion in hidden USD-denominated FX swap debt creates a paradox: near-term it could trigger a dollar squeeze, but the systemic scale means the Fed will ultimately be forced to print, resulting in structural dollar debasement. Gromen frames this as the inevitable resolution pathway regardless of near-term dollar strength.
[E8400] Foreign funding of US deficits ended in September 2018 when FX-hedged Treasury yields went negative via cross-currency basis swaps, making it uneconomic for European and Japanese investors to buy Treasuries. Foreign buyers stopped sterilizing US deficits since 3Q14. The next crisis will trigger a US balance of payments crisis — something not seen in 50+ years — requiring Fed monetization that structurally weakens the dollar.
[E8418] Gromen states explicitly: 'The US fiscal situation now requires a weaker USD and higher inflation, so that is what will be done.' The Fed's March 2023 decision to prioritize banking stability over currency defense confirmed dollar debasement as policy. Dan Oliver quoted: 'At some point the Fed will have to decide whether to defend the dollar or prop up the banking system and support the state.'
[E8428] Russia's ruble-for-gas scheme is described by the Kremlin as a 'prototype' to be extended to other commodity groups. If expanded across Russia's massive commodity export base, this could force global commodity trade away from dollar settlement toward gold-backed systems, structurally undermining dollar dominance in commodity pricing.
[E8440] Gromen argues USD debasement is inevitable as the only politically feasible release valve for the Fed's balance sheet trap. Quote: 'No one is more short the USD, sooner, than the US government.' Of four potential exits (Basel 3 repeal, foreign CB buying, spending cuts, USD weakening), only significant USD devaluation is politically viable. This is fundamentally different from Volcker's 1979-80 approach.
[E8454] Record tail on 20y UST auction despite stable DXY suggests further dollar weakness needed for Treasury market stability. Gromen references a potential 'San Francisco Accord' for coordinated USD weakening with China, and argues the US fiscal position (twin deficits, open capital account, 10y rates ~200bp above China's) structurally requires dollar depreciation.
[E8464] The US Net International Investment Position is now 'WAY more negative' than the 1976-2012 period, meaning when the USD strengthens, foreigners must sell massive amounts of USD assets, creating Treasury market stress. This structural change inverts historical dynamics where USD strength was sustainable, now making a strong dollar self-defeating and eventually forcing policy-driven dollar weakness.
[E8478] Gromen distinguishes between the 'dominance' of the USD and the 'price' of the USD, arguing structural forces including de-dollarization, resource nationalism, and insufficient global balance sheet capacity will force secular USD debasement. Foreign central banks buying record gold instead of USTs and Saudi Arabia investing petrodollar surpluses in Chinese refineries rather than Treasuries exemplify this structural shift.
[E8488] Gromen presents structural dollar weakness thesis: US debt at 2000% of GDP with 105% debt-to-GDP ratio and $200B weekly Treasury rollovers creates unsustainable dynamics requiring currency devaluation. Mnuchin confirmed currency will be focus of next China trade talks, suggesting coordinated devaluation potential. Powell endorsing 'making up for lost inflation' signals debt-to-GDP ratios becoming mathematically impossible.
[E8516] Gromen argues the post-1971 USD reserve system is mathematically incompatible with reshoring the US defense industrial base. US manufacturing costs are 80%+ higher than competitors (4-5x in shipbuilding vs China/South Korea), requiring significant USD weakness. Multi-currency oil pricing emerging alongside shale production decline accelerates USD outflows, with gradual USD devaluation via gold appreciation as the most likely path.
[E8527] Gromen argues USD devaluation is mathematically necessary for the US to compete with China, following the 1985 Plaza Accord playbook where the USD was devalued 46% against the JPY. Today's situation is more extreme because US defense contractors like Raytheon admit they cannot fight a war against China without Chinese supply chains, making a massive USD devaluation the likely policy response to restore competitiveness.
[E8528] US TBTF institutions are positioning for USD devaluation: BlackRock filed for a Bitcoin ETF after CEO Fink previously dismissed crypto, and JPMorgan became GLD custodian after their metals desk was criminally convicted for price manipulation. Gromen interprets these moves as institutional preparation for monetary system restructuring and dollar weakness.
[E8550] Structural dollar bearish case supported by fiscal dominance: foreigners sold $1 trillion in USTs since March 2020, US true interest expense at 111% of tax receipts, and the Fed structurally unable to tighten. Gromen acknowledges taper attempts could temporarily strengthen the dollar, but argues any such moves will be short-lived before forced policy reversal.
[E8568] Gromen observes that in this crisis, nations are hoarding physical commodities and banning exports rather than seeking US dollars as safe haven — fundamentally different behavior from past 40 years. This commodity-over-dollars preference signals de-dollarization acceleration, though USD is listed alongside gold, commodities, and BTC as near-term outperformers.
[E8580] Russia's ruble-for-gas scheme tied the ruble to gold at 5,000 rubles per gram, creating conditions for a massive short squeeze in the ruble that would drive gold prices higher and challenge the dollar-based system. Fed Chair Powell himself acknowledged 'rapid changes are taking place in the global monetary system that may affect the international role of the dollar in the future.'
[E8591] China has grown CNY-denominated commodity trade to $320 billion annually in 2024, uses gold floating in all FX/commodities to facilitate CNY pricing, and recently banned USD-denominated BHP iron ore purchases to enforce pricing disputes. This accelerates de-dollarization of commodity markets and structurally pressures USD commodity pricing dominance.
[E8839] Dollar weaponization against Russia is accelerating de-dollarization by the Russia-China alliance. US federal debt 'enormously increases the capability of other nations to weaponize the debt against us,' creating a structural vulnerability for dollar reserve status alongside geopolitical realignment.
[E8611] FFTT argues DXY is breaking down from its uptrend as the Fed/Treasury engineers USD weakness to address Treasury market dysfunction. Fed/Treasury has engineered USD weakness three times in past four years when Treasury dysfunction threatened system stability. USD weakness reduces terms-of-trade pressure on foreign creditors holding $7.6T in Treasuries, reducing their need to sell Treasuries to raise dollars for oil purchases and currency defense.
[E8631] Gromen contends the USD will now trade on a Balance of Payments basis where the US is the 'dirtiest dirty shirt' with the largest deficit. The US holds a record 70% share of global equity market cap, making it vulnerable to capital flight as the financial asset window closes and deficits are redirected away from dollar-denominated financial assets.
[E8642] FFTT argues history offers only two paths out of current sovereign debt crisis: currency devaluation with inflation or hard landing with sustained high unemployment. The 1920s precedent shows countries that chose deflation (UK) suffered 7-8% unemployment for 20 years, while those that devalued (Germany, France) recovered faster. US-China cooperation agreement signals coordinated managed USD weakening against gold.
[E8664] Europe quietly paying Russia in rubles for energy despite sanctions signals early erosion of dollar-centric payment infrastructure. The Peak Cheap Energy thesis implies central banks must ultimately choose inflation over default, which structurally weakens fiat currencies including the dollar against hard assets.
[E8670] USD strength paradoxically accelerating de-dollarization as countries facing dollar shortages turn to CNY swap lines for commodity trade. Zoltan Pozsar notes 'China has a swap line with everybody — nobody will have to hoard renminbi to trade with China.' Argentina and Pakistan cited as examples using CNY swap lines, saving USD reserves for debt service, creating self-reinforcing cycle expanding CNY utility.
[E8686] FFTT recommends underweight USD given expected continued monetary expansion. With US debt/GDP at 130% requiring deeply negative real rates and the Fed forced to delay QE taper or increase QE due to Delta variant, the dollar faces structural headwinds from ongoing debasement.
[E8710] China is switching commodity imports to CNY pricing/settlement, which increases trade surplus by reducing USD outflows. FFTT estimates every 10% of commodity imports switched to CNY adds $70+ billion annually to China's FX reserves. This explains how China maintains stable FX reserves despite large capital outflows, undermining traditional USD weaponization mechanisms.
[E8718] China is internationalizing the CNY by opening the Shanghai Futures Exchange to foreign participants, making yuan convertible through commodity markets. Multi-currency commodity markets with gold settlement are expanding as the USD-centric reserve system faces structural challenges. Monetary debasement is characterized as inevitable since growth-supportive policies require currency weakness.
[E8734] Chinese institutions massively increasing gold purchases while moving away from dollar-denominated assets signals de-dollarization acceleration. The 'Print or Default' dilemma facing the US government implies dollar debasement as the politically preferred path, with federal receipts collapsing and explicit money printing needed to fund industrial policy.
[E8752] DXY remains 'blissfully unaware' of debasement signals already priced into gold, Bitcoin, industrial equities, and commodities. UST volatility (MOVE index) has collapsed; if DXY follows its historical MOVE correlation, it could fall to 96-98 levels. Gromen argues coordinated USD weakening is being front-run by markets before consensus recognition, with only the dollar index lagging.
[E8753] China's record manufacturing surplus and 4-6x cost advantage over the US in critical technologies make CNY devaluation counterproductive — it would make China 5-8x cheaper and worsen the trade imbalance. Yellen's April 2024 China trip focuses on making Chinese goods more expensive, indicating CNY revaluation discussions that imply negotiated USD weakening as the policy path forward.
[E8767] Gromen argues dollar debasement is inevitable: the US needs either a bigger stock and housing bubble, or a sharp USD devaluation paired with Fed Yield Curve Control (YCC) or its functional equivalent. The current stock bubble is 'much more nuts and one direction' than 1999, yet still leaves the US deficit at 7% of GDP, proving asset inflation alone cannot fix the fiscal trajectory.
[E8777] Despite normally USD-bullish conditions — Hong Kong unrest, $800B UST issuance, and $200B Treasury General Account rebuild — DXY remained flat as of October 2019. Gromen argues 'no one is more short USD than the US government,' which requires the Fed to create whatever dollars the government needs, structurally undermining the dollar.
[E8778] China/Russia commodity deals are bypassing the USD system, reducing structural dollar demand. Rio Tinto joined Vale in CNY-denominated iron ore sales, and Putin-Saudi deals likely contain non-USD settlement options. China's $700B non-commodity trade surplus could eliminate the 'USD shortage' narrative if all commodity imports move to CNY.
[E8794] Luke Gromen argues US/EU sanctions freezing Russian FX reserves represent a historic 'break the glass moment' ending the post-1971 USD reserve system. By demonstrating that $12 trillion in global FX reserves are subject to political confiscation, these actions force foreign central banks to abandon sovereign debt as reserves and shift toward physical gold, marking the end of 40 years of globalization, disinflation, and USD dominance.
[E8815] Gromen expects USD weakening as a key consequence of the anticipated Fed pause by September 2022. In his framework, the Fed pivot triggers falling short-end yields and rising Eurodollar futures, which would weaken the dollar. Only in the overtightening scenario does USD outperform, but Gromen views that as unsustainable due to fiscal constraints.
[E8869] The potential Saudi shift from USD to CNY/gold pricing for oil exports to China, combined with the Fed's structural inability to taper QE due to True Interest Expense exceeding 111% of tax receipts, creates conditions for a structural dollar bear. The petrodollar system that underpins global USD demand may be breaking down.
[E8881] Chinese Foreign Ministry quoted Nixon-era Treasury Secretary Connally's 'the dollar is our currency, but it is your problem,' signaling China's awareness of dollar weaponization risks. Escalating US-China tensions could reduce foreign UST demand as China repatriates capital, undermining the structural support for the dollar while the US faces unsustainable fiscal dynamics.
[E8890] Gromen argues the banking crisis is actually a US balance of payments crisis disguised as sector stress. Foreign central banks stopped buying Treasuries since 2014 while US deficits exploded. China reduced FX reserves from 46% of GDP (2013) to 18% (2023). Multi-currency commodity pricing accelerates as China, Saudi Arabia, and Brazil reduce dollar dependence through direct energy deals.
[E8891] Saudi Aramco signed $3.6B in China deals for 690,000 bpd in Yuan-settled oil. China completed its first Yuan-denominated LNG trade. Brazil-China clearing arrangements established. Gromen states 'CNY-denominated energy and commodities de-weaponize the USD,' signaling accelerating dedollarization in commodity markets.
[E8912] Gromen argues the strong USD and rising rates are not signs of US strength but rather signs the USD-centric monetary system is unwinding chaotically through deleveraging. $13 trillion in offshore USD debt forces foreign selling of USTs, and Fed/Treasury liquidity injections are inevitable, which will weaken the dollar.
[E8922] BRICS are fundamentally reshaping global monetary flows by recycling surpluses into domestic real assets and gold instead of US Treasuries. This forces the US to import its own deficit-driven inflation as foreign central bank demand for USTs declines. The BRICS capital account is opening via rising gold prices, representing a structural shift away from dollar-denominated reserve accumulation.
[E8934] China offering yuan financing for Russian commodities while restricting USD letters of credit creates an elegant de-dollarization mechanism that appears to comply with Western sanctions while directing Russian trade toward yuan settlement. Chinese government bonds outperforming USTs on 2, 3, and 10-year basis signals structural power shift away from USD.
[E8935] Potential ejection of Russia from SWIFT payments system identified as a major de-dollarization catalyst. Obama 2015 quote cited: 'such actions could trigger severe disruptions in our own economy, and raise questions internationally about the dollar's role as the world's reserve currency.' Every yuan transaction for Russian commodities will be approved per Gromen's analysis.
[E8944] Foreign central bank USD reserves fell to lowest levels since 2013 as de-dollarization accelerates. Washington's weaponization of the dollar is backfiring as countries reduce greenback holdings and switch to other currencies in trade contracts, creating structural headwinds for USD.
[E8945] Russia's Rosneft now prices crude in EUR, China-Iran signed $400B strategic partnership avoiding USD, and 8 additional EU countries joined INSTEX to circumvent US sanctions, creating multi-currency energy pricing infrastructure that structurally reduces global USD demand.
[E8946] US Treasury's weighted average maturity is falling despite ~$16T in negative-yielding global debt creating the 'strongest bid for duration in 5,000 years,' suggesting foreign demand for long-dated USTs is much weaker than consensus believes and undermining dollar support.
[E8976] With US NIIP at -70% of GDP, foreigners hold massive USD assets creating vulnerability. China's shift to buying gold with foreign currencies rather than recycling into USTs represents active de-dollarization. Gromen argues $13T in foreign USD debt and $55T in foreign USD assets make austerity impossible as it would create a deflationary spiral, implying continued dollar debasement is the only viable path.
[E8995] The USD faces a narrow corridor constraint where policymakers must maintain it in the 103-105 range. Too strong USD threatens the $57T global USD carry trade; too weak USD triggers JPY carry trade unwinding. This policy trap, combined with the need for eventual USD weakening to manage debt sustainability, supports the structural bear thesis for the dollar.
[E9007] The Fed's structural inability to taper at 130% debt/GDP, combined with stealth QE tools ensuring perpetual dollar liquidity expansion, supports a long-term bearish dollar thesis. IMF Chief Economist Gopinath warned 'poor nations cannot afford a situation where you have some sort of a tantrum in financial markets,' highlighting global vulnerability to any dollar liquidity withdrawal attempts.
[E9025] Treasury Secretary Bessent's revelation that allies will invest in US factories 'at the president's discretion' rather than bonds marks the end of post-1971 capital flows into financial markets. Gromen argues this structural pivot requires USD devaluation to 65-75 DXY over 3 years to rebalance trade while preventing bond market collapse, representing the end of the post-Bretton Woods monetary era.
[E9054] Gromen's framework implies structural dollar weakness: with 98% of nations at 130%+ debt/GDP resolving through devaluation or inflation, and the US now at that threshold for the first time as reserve currency issuer, the path of least resistance is currency debasement. His recommended portfolio of gold, Bitcoin, and commodities reflects expectations of dollar purchasing power erosion.
[E9061] Gromen argues US debt dynamics (365% debt-to-GDP) make austerity politically impossible, forcing a currency debasement path. Credit bubbles 'resolve only two ways: widespread default or debasement, often both.' The delayed Trump Treasury Secretary selection signals internal debate over managing the tariff/devaluation dilemma, with debasement being the path of least resistance.
[E9074] The energy-driven FX crisis forces countries like the UK to print domestic currency to buy USDs for energy imports, but eventual Fed pivot to QE into elevated inflation will undermine the dollar. Gromen positions for dollar debasement through gold, Bitcoin, and commodities as the Fed is forced to monetize to prevent system collapse.
[E9087] Russia planning $70B yuan reserve purchase and exploring gold-backed settlement systems, shifting energy trade to local currencies. This de-dollarization dynamic, combined with the Fed's inability to maintain positive real rates due to debt levels, supports the structural USD bear thesis long-term.
[E9097] Gromen argues structural USD debasement is the only viable policy path to maintain system stability given US fiscal math at 120% debt-to-GDP. Controlled dollar weakness is needed to inflate away debt burdens, with Wall Street elites positioning accordingly through Bitcoin ETFs and gold custody shifts.
[E9112] Author suggests the Bessent/Trump administration may be intentionally creating a financial crisis to justify USD devaluation as a 'Machiavellian strategy.' The termination of the 1984 US-China tax treaty and capital controls could accelerate de-dollarization as China's trillions exit US assets. BOJ rate decisions with Japan inflation at 4% could add further pressure on the dollar.
[E9120] A CNY devaluation versus USD would likely trigger a UST and Western sovereign debt spiral. China's 10-year government bond yields are 300-400 basis points below US and major allies, hitting multi-decade lows while Western bond markets dysfunction, suggesting China will 'break last' in a global debt crisis.
[E9145] Luke Gromen argues Peak Cheap Oil is forcing a defensive monetary system shift where China uses CNY-oil trade settled in gold to avoid a 1997-style currency crisis, fundamentally challenging USD reserve status. He notes every prior commodity bear market ended with a global monetary system shift and dollar devaluation that stimulated resources.
[E9159] FFTT contends the US fiscal situation—debt/GDP at 120%, fiscal deficits at 8%, and political/mathematical impossibility of meaningful spending cuts—creates a structural bias toward USD weakness. Entitlements and defense consume 87% of receipts, and any meaningful cuts would trigger recession, paradoxically worsening deficits through collapsed tax receipts.
[E9171] FFTT sees the China/US portion of 'Globalization 2.0' as definitively over, noting that when senior bankers and Washington establishment finally admit this reality, the financial repricing — similar to the 1914-1945 period — typically follows with significant declines in financial assets relative to gold, implying structural dollar weakness.
[E9183] Gromen highlights accelerating de-dollarization in commodity markets: Chinese exports to Saudi Arabia up over 100% since US sanctioned Russian reserves in 2022, China completed first digital yuan crude oil settlement of 1 million barrels in October 2023, and China's 'optionality not exclusivity' CNY-denominated commodity trade reduces USD outflows by $100-150B per 10% of commodity imports done in CNY.
[E9194] Gromen argues EU and Russia are moving toward EUR-denominated energy deals via Nord Stream 2, potentially creating a 'EUR-denominated gas for EU goods and gold' arrangement that breaks the petrodollar system. This threatens USD hegemony by removing the dollar's intermediary role in European energy procurement. The Fed's forced money printing further undermines dollar strength.
[E9207] Saudi Arabia's openness to multi-currency energy pricing and Ghana's gold-for-oil program represent the beginning of a structural shift away from dollar-centric energy trade. Multi-currency pricing allows oil exporters to match currency receipts with trade patterns (e.g., selling oil in CNY to buy Chinese goods), with net settlements in gold, undermining the petrodollar system that underpins USD reserve status.
[E9224] Gromen argues coordinated USD weakening is underway, evidenced by the Fed's surprise dovish pivot despite loose financial conditions, ECB maintaining tight policy, new UST market structure rules, and Treasury's shift to T-bill issuance. He posits a potential 'San Francisco Accord' between US and China to systematically weaken the USD to address unsustainable debt dynamics.
[E9225] CNY oil payments are reducing USD recycling pressure, undermining traditional petrodollar demand. This structural shift in energy trade settlement supports the thesis of a weakening dollar as fewer oil revenues are recycled into US Treasuries and dollar-denominated assets.
[E9242] FFTT argues the US cannot decouple from China unless the USD-centric currency system changes, requiring a significant USD repricing lower against CNY, EUR, and JPY. The US suffers from 'USD Dutch Disease' — over-reliance on dollar/debt production rather than real goods — and decoupling would require ending this dynamic through substantial dollar devaluation.
[E9256] TIC data showing foreign selling of USD assets suggests the dollar was already 'too strong' at DXY ~95, much lower than previous problematic levels of 100-103. Negative foreign flows combined with structural need for Fed liquidity provision to support the Treasury market points to dollar weakness as a necessary policy outcome.
[E9264] Structural shift away from dollar accelerating: Russia converting all oil and gas dollar proceeds into physical gold, China announced it will cease increasing USD-denominated reserves. Coordinated de-dollarization creating a 'Russian-Chinese festival of life' excluding the dollar, effectively replacing trade dollars with gold.
[E9273] Currency warfare between US and BRICS is accelerating de-dollarization. The China and UAE-backed mBridge digital currency platform is considered so advanced that the IMF hosted discussions in April 2023 about bringing it under control to prevent it morphing from a technical solution into a geopolitical tool that circumvents USD payment rails.
[E9284] Gromen frames Biden's celebration of USD strength as revealing dangerous ignorance of systemic implications. The strong dollar makes FX-hedged UST yields deeply negative for foreign investors, forcing massive selling. The Fed faces a binary choice: let the system collapse (USD and yields to the moon) or resume QE, which FFTT expects will happen after more pain, ultimately weakening the dollar and benefiting gold and energy.
[E9294] IMF COFER data shows global FX reserves rose $344B in Q4 2022, with EUR reserves up 7.2%, JPY up 7.8%, GBP up 10.2%, while USD reserves stayed flat. Gromen interprets this as coordinated 'Daisy Chain' QE where Western central banks buy each other's debt to manage USD strength and treasury volatility, suggesting loss of USD dominance and transition to commodity-backed trade.
[E9303] Luke Gromen argues de-dollarization is accelerating not due to ideology but economic necessity — countries exhausting USD reserves face 'economic Mad Max' scenarios and are switching to CNY for commodity trade. Standard Chartered RGI shows asymptotic rise in CNY trade since 2019. The survival instinct makes de-dollarization unstoppable once reserves are depleted, creating a self-reinforcing cycle away from USD.
[E9326] The stagflationary trap described by Gromen — where the Fed cannot tighten aggressively due to US debt levels and must accommodate inflation — implies structural dollar weakness. If the only viable policy option is inflating away debt via Fed-monetized deficits, the dollar's purchasing power is systematically undermined over time.
[E9336] US runs a budget deficit more than 2x as big as Canada, Eurozone, Japan, and UK combined, and unlike all others funds this with very short-term debt. Defense industrial weakness exposed by Ukraine conflict accelerates need for USD devaluation to restore competitiveness. 'USD Dutch Disease' has hollowed out the US defense industrial base over decades, creating structural pressure for dollar weakness.
[E9359] Gromen argues EU and Japan face economic collapse unless they abandon dollar-denominated energy purchases in favor of local currency (EUR/JPY) settlements backed by goods and gold. Asia (India, China, SCO) is already implementing de-dollarization, gaining competitive advantage over Europe/Japan which remain trapped in USD energy pricing.
[E9376] With US debt/GDP at 125% and deficit/GDP at 7%, Gromen argues fiscal dominance is inevitable — the US must choose between a debt spiral or massive money printing. Either outcome undermines the USD structurally, as the reserve system faces fundamental contradictions between fiscal needs and currency strength.
[E4751] During this period in here, rates were falling or rates were going up at the ...
[E4898] Dollar entering long-term structural bear market as American dominance in software/AI monopoly ended with democratization via open-source models. Mag 7 valuations overstated relative to hardware/commodity beneficiaries. 30-year dollar monopoly on coding ended with AI; next phase hardware/commodities favored over software-centric US stocks.
[E5194] Dollar in structural bear market as AI democratizes and erodes US hegemony. Six consecutive months of weakness; global reserve currency status under existential threat; crypto and stablecoins filling vacuum created by dollar debasement.
[E5616] Dollar structural bear case unfolding with world flush with dollars. Rally in dollar temporarily driven by rates but longer-term trend is weaker. Mag 7 faces headwind from 49% overseas revenues in stronger dollar environment.
[E5441] to believe you will see this uh Amazon versus everyone type thing that dominated from 2009 to 2019 will continue MCI world x the US in local currencies approaching the all-time highs after it had fallen uh again as the dollar weakens, remember it is a massive stimulus for the rest of the globe.
[E5166] Dollar declining as real 2-yr yields compressed by inflation expectations rising while Fed holds. Nominal 4.5-5% growth vs 2% rates creates negative reals; market expects easing not tightening.
[E4934] Dollar entered structural bear phase with max MACD sell signal. Commodity currencies rallying indicating liquidity shift. Dollar weakness historically coincides with ISM bottoms or market inflection. Previous instances showed 75-125 basis points moves in rates following MACD sell signals. Current dollar slide accelerating due to tariff uncertainty and Fed rate cut bias.
[E4985] Dollar overvalued per Big Mac purchasing power. Week-to-week strength unprecedented. Yuan at lowest since 2008. But tariffs and potential China deal could shift currency narrative. Stronger dollar headwind for Mag-7 earnings if maintained. Depreciation could come if tariffs truly implemented, pressuring rates higher.
[E4848] Dollar structural weakness as reserve diversification accelerates. Multiple-decades-long trend of dollar accumulation reversing. Nations no longer need dollar reserves at current levels. Emerging markets increasingly settling trade in local currencies, crypto, or barter rather than dollars.
[E4839] Dollar weakness structural as fiscal deficits force monetization and reserve diversification accelerates. Yuan strengthening despite Chinese stimulus indicates currency regime shift. Emerging markets benefit most from weaker dollar + AI + crypto opportunity for leapfrog development without legacy infrastructure burden.