Dollar Decline Sparks Market Anomalies as Stocks Defy Expectations

2026 is defying textbook economics as stocks continue to rise despite war, aggressive Treasury buybacks, and expectations for higher interest rates. The common thread behind this anomaly is the declining value of the US dollar.

The dollar's recent decline has led investors to exchange financial promises for assets that governments cannot print or manipulate easily, such as precious metals, commodities, and Bitcoin.

According to Charles Schwab, currency debasement in its modern form is driven by excessive government debt, relentless money creation, and declining confidence in national currencies and institutions.

The result is the return of the debasement trade, with the United States at its center. Goldman Sachs strategist Brian Garrett notes that gold's rally could lose momentum, but also argues that debasement is a defining market theme that isn't going away anytime soon.