Time for a new king?

If we had to rank one investment idea, or one asset as the most important or most influential to investors and other asset classes in the current context, it will probably be the dollar. Since WWII it has been the world’s currency reserve and the petrodollar system has guarantee its hegemony. But due to the abuse that Congress has perpetrated on the country’s finances with excessive debt and deficits, its value is being diluted. So much so, that 2025 has been the weakest year so far for the dollar since the beggining of this century, 25 years ago. $37Tn of debt, growing at a pace of $1Tn of debt every 100 days, and new tax bill that assures the deficit will grow even more, and perhaps two wars where we might be involved directly or indirectly, are weighting on the U.S. dollar, making it weaker by the day. To put it in perspective, the S&P 500 total return over the last 3 years has been 49% measured in USD. But if you measure it in gold, the index has lost 19% over the period. The stock market has not been able to compensate you on the dollar loss of value over that period. For the U.S. core Aggregate index, the relative loss is 40%. It does appear that gold is becoming the new currency reserve, once again.

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