Logomark

The Dollar Is Unhinged Paper Currency, But We Can Still Save It

Source: Miles Franklin | Date: December 23, 2025

Key Takeaways

  • The US dollar has lost 98% of its purchasing power since the Fed's creation in 1913, with unhinged paper currencies "never working"
  • Central banks are actively diversifying away from the dollar into gold and alternative payment systems, signaling a fundamental shift in the global monetary order
  • Cryptocurrencies like Bitcoin and stablecoins represent private market solutions to government currency debasement
  • A return to sound money requires linking the dollar to commodities (preferably gold) and controlling the Fed's balance sheet based on spot commodity prices rather than interest rate targeting
  • The dollar can be saved but requires complete philosophical change at the Fed, similar to the Volcker era approach

Market Views

  • Gold prices reflect a "run away from the dollar" as people seek security
  • The dollar remains the "tallest in the group" among fiat currencies but faces existential threat if current policies continue
  • Expects improved dollar performance under new Fed leadership (Kevin Warsh or Kevin Hassett)
  • Advocates for 10-year bond yields around 4% with zero inflation as optimal target
  • Warns of continued dollar debasement if Fed expands balance sheet further

Assets Discussed

  • Gold: Central banks buying at record levels, serving as neutral reserve asset for BRICS nations and China's cross-border payments
  • Bitcoin: Described as store of value with fixed 21 million supply, part of private solution to currency problems
  • Tether (USDT): Praised as stable coin enabling transactions in developing markets, though concerned about diversification into gold/Bitcoin
  • US Treasuries: Fed balance sheet expanded from $800 billion (2008) to $9.7 trillion, with Powell planning additional $40 billion purchases

Notable Quotes

  • "Unhinged paper currencies never work. They just never work. You can't have an unhinged paper currency where people are dancing around the Fed ballroom throwing buckets of money up in the air and expect stable prices."
  • "If it's left unattended, there is no future for the US dollar or any other paper currency in the world."

Auto-generated summary.