Geopolitical Economy Report US dollar dominance could end very fast, warn top economists. This is how
Aug 27, 2025
The decline of the US dollar's dominance is gaining momentum, with economists surprising even mainstream voices speaking out. Trump's policies may cause a swift transition toward de-dollarization amid geopolitical shifts. As the dollar's role diminishes, the rise of China's influence and increasing gold purchases by central banks come into play. Concerns over inflation and US Treasury market volatility further complicate the landscape, and tensions surrounding interest rates are adding pressure as foreign investments dwindle.
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Use Gold As Sanctions-Resistant Insurance
- Consider gold allocations as insurance against sanctions and reserve seizures. Central banks are increasing gold precisely because it is harder for Western states to freeze or seize physical gold holdings.
Foreign Official Treasury Demand Has Fallen
- Foreign official holdings of U.S. Treasuries have fallen from ~34% (2015) to under 25% recently. China is a major net seller, reflecting de-dollarization and fear of asset seizure since 2022.
Watch Private Flows And Leverage Signals
- De-risk by monitoring private vs official Treasury flows and hedge-fund leverage indicators. Prepare for sudden volatility when basis trades unwind and margin calls force Treasury sales.