Dollar Diversification and the Rise of the Debasement Trade
The debasement trade is gaining traction as nations reassess their dollar holdings and government bonds. In this week's Money Metals Midweek Memo, host Mike Maharrey discussed the trend of investors seeking tangible assets such as gold and silver to protect against declining fiat currency purchasing power.
Maharrey framed the trend as a matter of trust, noting that if people no longer trust institutions managing their money, they will naturally seek assets not created or controlled by those institutions. Gold and silver have historically filled this role because they are not issued by governments and carry no direct currency-debasement risk.
The underlying question is not whether governments will continue to borrow and spend, but how long markets will tolerate the consequences. Maharrey noted that gold prices could continue rising until policymakers learn to address debt burdens.