Debt and fear of a tariff war erodes confidence in the American currency.
The financial system seeks alternatives, accelerating the transition to a multipolar order.
For decades, the hegemony of the US dollar seemed unquestionable, but today it is in the center of a growing uncertainty. This fall of the green ticket, as Bank of America (Bofa) alerts, is not just a passing fluctuation, but could be the prelude to a new global monetary order.
An internal report of the bank giant warns about an acceleration of the drop in the dollar in the coming months. According to the analysis led by the Athanasiosios Vamvakidis strategist, three key factors are decorcing the strength of the dollar.
First, Trump’s tariff war is mentioned, which are considered a shot by the cylinder head. “Tariffs are more harmful to the US than for its commercial partners,” says the report, stressing that the US economy depends more on global trade than any other.
The second is an unsustainable public debt that exceeds 37 billion dollars, combined with an expansive fiscal policy that is shooting financing costs for the United States, generating serious doubts about its fiscal viability.
And thirdly, there is the fact that greater weakness is anticipated in the value of the US dollarreaching levels not seen in years. This is reflected in the DXY index, which measures the strength of the green ticket in front of a basket of main currencies and has fallen 9% in 2025, placing itself at 99.74 points, its lowest level since April 2022.
Public debt is part of a time bomb
What happens is that “it dominates the negative, due to political uncertainty, a pause in corporate investments, and tariffs that could multiply,” summarizes the report of Bofa aimed at its customers, painting a gloomy panorama for the American currency.
In itself, gold is living a golden age, reaching historical maximums the last month of $ 3,500 per ounce. In fact, its reverse correlation with the dollar remains firm, with an appreciation of 30% since December 2024, exceeding even previous projections such as Bofa that placed it at $ 3,000 by 2025.
Meanwhile, the main digital currency, Bitcoin (BTC) advances strongly, driven by an institutional adoption wave. Its price also reached a new historical maximum (ATH) of more than $ 111,000 per unit and with projections that point to greater rise, breaking with the “sell in May and go”, as reported by cryptootics.
The weakness of the dollar has already been alerted by other analysts, including Ray Dalio, for whom there is a systemic breakup that could redefine our era.
The current situation is accelerating the search for alternatives and new financial strategies, since an accelerated defolarization is occurring, With Asian currency, such as the South Korean Won and the Chinese Yuan or Renminbi, gaining ground today.
Mallers’ criticism focuses on how the United States managed He has taken the country to a state of mass debt.
This model, Mallers explained, is caught in the so -called “triffin dilemma”, where the need to supply dollars as a world reserve currency generates increasing deficits, since the world requires more dollars than the US economy can produce in goods and services.
The transition to a new order will be long
First of all this, the weakness of the dollar is no longer a merely cyclical phenomenon, but could be indicating a deeper structural changeas Lyn Alden macroeconomist points outwho recently said that “the transition to a multipolar financial system, with greater use of gold and bitcoin as reserve assets, could be a long and potentially inflationary process.”
Among your recommendations is precisely Consider investment in neutral assets such as gold and bitcoin, preferably in them for the next 12 months.
In itself, Alden concludes that the US trade deficit, linked to its status as a reserve currency, generates unequal benefits and costs, exacerbating deindustrialization and populism. The proposed solutions, such as tariffs and monetary agreements, face significant challenges, and the global financial system could be in a transition to a multipolar model, with deep economic and social implications, so it is best to take the forecasts and protect themselves.
