Brace yourself: the US dollar is crumbling. This isn’t just a blip—it’s on pace for a historic collapse that could reshape global finance and your wealth.
According to Semafor, the greenback has already dropped over 7% in 2025, with analysts at Morgan Stanley warning of a potential additional 10% slide, sparking fears about its value and its bedrock status in the world economy.
This isn’t a sudden shock. The dollar’s slide has been building through the year, marking one of the worst performances in modern times.
The last time the dollar saw a decline this severe was back in 1973. That was when President Richard Nixon severed ties to the gold standard, a move that shook global markets.
Today’s drop raises similar questions. Could the dollar lose not just its purchasing power but its role as the world’s financial linchpin?
For now, alternatives are scarce. Despite efforts to move away from dollar dominance, no other currency or asset has stepped up as a serious rival.
Some central banks have shifted reserves into gold. Others, like China, have offered currency swap lines to developing nations. But these moves haven’t dented the dollar’s grip on global trade and finance.
As political economist Ngaire Woods noted in an essay for Semafor, “They haven’t dethroned the dollar.” She credits sound US policy and global engagement for maintaining its status.
Still, the dollar’s weakness isn’t just academic—it’s personal. A cheaper dollar could make US exports more competitive, aligning with President Trump’s push to rebalance trade.
But there’s a flip side. Imports get pricier with a weaker dollar, amplifying the sting of tariffs for American consumers and businesses.
This double-edged sword worries analysts. As Wilson from Morgan Stanley cautioned, “Big moves in the dollar tend to create moments of instability.”
That instability could ripple through your portfolio. Currency swings affect everything from travel costs to the price of imported goods—and even the value of your investments tied to global markets.
So, what can you do? Consider hedging against currency risk—think gold or diversified international assets. "Stay nimble"; a falling dollar might open opportunities in export-driven US firms. Keep an eye on policy, too. Government moves to shore up or further weaken the dollar could shift the landscape overnight for savers and investors alike.
Bottom line: the dollar’s historic slide is a wake-up call. Protect your wealth, question fiat money’s endless printing, and remember that free markets—not government meddling—build lasting prosperity.