Trump’s Actions: Is the US Dollar Becoming Toxic?

“These spasms offer a glimpse of an upside-down world in which dollar assets are no longer safe. A worrisome prospect given that the dollar is the world’s reserve currency,” writes The Economist.

Also, the publication explains the unprecedented rise in gold prices observed in the last year with the loss of confidence in the dollar, as investors protect themselves from the devaluation of the American currency and other related risks.

The authors of the publication point out that, fortunately for America, there is currently no real alternative to the dollar in the world, so investors are “destined” to suffer losses for a certain period of time by holding assets in American financial instruments. However, all this creates a “risk of the emergence of an alternative.”

“How long can America continue its run of luck? The country is fortunate that investors have few alternatives to the dollar. Precious metals are poor substitutes for hard currencies, but unstable politics and a falling exchange rate make holding the dollar riskier than it has been in decades,” the publication concluded.