I know that it’s summer and the news flow has slowed down considerably since we have ceased bombing the dog snot out of Iran, there’s no major wars of interest to cover with live video, and President Instability’s family has gotten boring issuing NFTs like my new kitty uses the litter box.
But the excitement over the Dixie (DXY- US Dollar Index) taking another dump is just a bit over the top. The big chart that everyone wants to spook their viewers and create a story is this one taken as an example from CNBC.com:
They way some of the media is hyperventilating, you would think the dollar is about to crash out and go to zero.
The very same people don’t want to remember this part of the story, nor do they want you to remember this:
Trump Wants the Dollar to Be Mighty But Weak. It Makes No Sense.
The article above is from Barron’s on February 24, 2025 and was written by Benn Steil who is the director of international economics at the Council on Foreign Relations. Not exactly the ultimate anti-globalist outfit in US think-tanks. This excerpt however provides perspective on the complexity of the problem:
Both Trump and Vice President JD Vance have, for some years, been outspoken in support of a weaker dollar. They believe that depreciation will cut the U.S. trade deficit and help U.S. manufacturers and exporters. But they have also contradicted themselves, and each other, repeatedly on matters that have a strong and enduring impact on the level of the dollar.
In other words, the Trump administration is more than happy to pay lip service to maintaining the world reserve currency status, but want to boost exports by weakening the US dollar over time. Needless to say when one tinkers too much one way or the other bad things will happen, but let’s return to today’s online and media drama.
When one looks at the chart above you might think, “wow, this is bad!”
Now get old like me, if you can before AI determines if you’re worthy of keeping, and look at the full picture from a historical perspective:
That was just 17 years ago. Imagine the reaction if we were to watch a crash like we did from 2003 to 2008 in the next 6 months. Then you can freak out and I’ll be right there with everyone. At that moment, as we were all concerned as to how in the world Bear Stearns, Goldman Sachs, Countrywide, and Indymac would survive, as no one wanted to own, hold or even be anywhere near the dollar or its assets as a complete financial system collapse in the United States looked like a realistic possibility.
It was not until shortly after that scare when the Fed basically said “we’ll cover your ass” did the dollar begin to rally a little until Fed Chair Ben Bernanke announce QE to infinity and beyond in March of 2009.
If Donald Trump really wants something to fret about along with his business media buddies, perhaps thinking about the implosion of his trade policies creating a deflationary death spiral in 2026 should be of a higher priority.
