Get Ready for the Dollar to Crash

As Joe Biden’s chairman of the Securities and Exchange Commission (SEC), Gary Gensler did everything he could do to protect government money against threats like Bitcoin. In a couple of months, Gensler will be out of the picture, so who will protect the precious U.S. dollar?

Trump’s pick for the SEC’s top position certainly won’t be on the war path against Bitcoin like Gensler was. Trump is a cryptocurrency supporter, and besides, he kept the U.S. dollar relatively cheap during his first term to make it easier to service the national debt.

Meanwhile, governments and central banks outside of the U.S. won’t have any desire to protect the dollar. As evidence of this, global central banks in BRICS nations and elsewhere have built up their gold reserves and reduced their dollar holdings.

Sure, Gensler and the Biden administration in general have promoted the dollar during the past four years. As a result, the mainstream press continues to call the U.S. dollar “strong” – but don’t get the wrong impression from this.

They’re not measuring the dollar against alternative asset classes, such as Bitcoin or gold or silver. Rather, they’re only measuring the U.S. dollar against other countries’ fiat currencies.

Courtesy: Yahoo Finance

As the old saying goes, the dollar is just the cleanest shirt in a basket full of dirty shirts. To put it another way, the dollar is only outperforming on a relative basis as governments around the world continue to debase their fiat currencies through relentless money printing.

UBS analysts led by Solita Marcelli evidently don’t expect the dollar to continue to rising like it has done in late 2024. “We think USD strength has limits, and that the dollar’s valuation may
now be stretched,” the UBS analysts stated.

With Gensler out of the way soon and BRICS nations divesting their dollars, there’s room for the dollar to fall – and room for gold to rise in comparison. Indeed, UBS maintains a $2,900 target for gold through year-end 2025, calling the yellow metal a hedge against “political pressures including higher government debt levels.”

Personally, I view $2,900 as a lowball estimate, but I’m not constrained by the responsibilities that big-bank analysts have to deal with. Unlike them, I’m free to speak my mind and predict a dollar collapse if that’s what I’m seeing.

Not that gold and Bitcoin need a dollar collapse to move higher; notably, they’ve reached all-time high levels this year despite the dollar’s so-called “strength.” Moreover, silver has quietly surpassed $30 this year, though gold and Bitcoin have received a lot more attention in the press.

Courtesy: @SilverWolfAG

Besides, there’s no law requiring everyone to measure gold, silver, and Bitcoin’s progress against the U.S. dollar in particular. Impressively, gold recently achieved a major milestone as it achieved a new all-time high in euros.

So, what’s next for the “almighty dollar”? The UBS analysts envision the greenback “entering a phase of uncertainty,” which is probably a polite way of predicting a dollar pullback since the market hates uncertainty.

This isn’t a call to bet against the U.S. dollar through a short position. Instead, I just want to direct your attention to inflation-resistant assets like precious metals and cryptocurrency.

At high relative price levels, and without Biden and Gensler to defend it in 2025, the dollar’s glory days are numbered. The smart money knows that cash is trash, and while it’s fine to have some cash available to buy stocks at low prices, I encourage you to hedge your portfolio against the dollar’s dreadful downfall.