Down she goes

Today the Canadian dollar was assaulting the 74-cent level. Oil was up another 1%. Gold added $114 an ounce, surging to $5,295 US. Bitcoin swelled by $700 a thingy.

All that because the US president’s words:

“I think it’s great,” Trump said, speaking to reporters in Iowa, when asked if the dollar’s value had declined too much. “The dollar’s doing great.”

Mr. Market interpreted that as, “let’s throw ‘er overboard, boys’, and down she went. The American currency fell sharply – the most since last April’s tariff shock – continuing a descent which makes American exports cheaper and pushes up the value of all the stuff in the world valued in or measured against the US$. Like the loonie.

In case you hadn’t noticed, the drop in the value of the Yankee currency over the first year of Trump 2.0 has been dramatic. In 2025 the dollar index had its worst year since 2017 (Trump 1.0). The plop has been about 10% overall, with a 15% decrease against the euro and a decline of 8% against our dollar.

Why?

Moreover, are the preppers, doomers, bullion-lickers and silver hoarders correct? Is this curtains for fiat money, or at least the beginning of the end of the US$ as the globe’s reserve currency? Will we have to start paying hockey, football and basketball players in crypto and gold bricks?

Investors have been selling off the American dollar because they don’t trust Trump. He’s upended established and profitable global trade patterns. His aggressive 19th Century economic strategy of retaliatory, reciprocal, punitive and just-cuz-I-feel-like-it tariffs are inherently inflationary. He is anticipated to force interest rates down when he bombs the Fed later this year. And an over-stimulated US economy (tax cuts, red tape slicing, enviro retreat, bloated government spending) weakens the dollar as more are created.

So, expect this to continue, since the guy is just ramping up. Currency devaluation is an effective weapon. The cheaper the greenback gets against the yen, euro or loonie, the better it is for corporate America to fight China for market share.

Besides, when higher-priced imports hit US tariffs, Washington collects more money it can then spend on ICE thugs cracking heads. It’s all good.

Now, what about currency collapse and the end of the fiat money system?

(By the way, fiat currency is money issued by a government that is based on public faith and trust in the country, the economy, the central bank and that government’s power to tax. There is no pile of physical assets – like gold – backing the currency. This allows for more flexible monetary policy unlike in the days of the gold standard when politicians had little ability to deal with inflation or deflation. Both Canada and the US dropped gold-based currencies in 1933, after the Great Depression underscored this policy’s abject failure.)

This blog comment posted a few hours ago is a fine example of what happens when people think with their pants:

Your wealth will be determined by how much gold you own. Silver and Platinum will go along for the ride. This is part of the great reset. The U.S. dollar will collapse along with the trillions in debt. The west will be one of worst places to ride out this coming collapse.

None of this will happen, of course. Not in this lifetime. Nor that of your grandkiddos.

The world’s biggest economy will get bigger, despite its occasional mismanagement and absurdly-low tax rates. The measure of wealth will be in either liquid form (money and cashable assets) or useful stuff, like a place to live. If the wheels truly come off for western societies (not happening) you’d need currency for food, shelter, fuel and ammo. And kibble.

The reasons you can’t buy gas, chicken breasts or pay the rent in gold (or Bitcoin) at this moment are the same ones which will always be there. To be worth anything on the street, precious metals must be converted into a medium of exchange – which is money. Yeah, the fiat kind. All gold can do is sit and be a patient rock growing in capital value (or losing it) until that conversion makes it useful.

So why not horde money instead? Better still, invest in liquid, cashable, growthy assets that don’t need to be stored in a can in the backyard or taken to a dodgy PM guy to be turned into cash (minus the capital gains tax).

Well, speaking of money the Bank of Canada held the line on interest rates today. As expected. In fact, it looks like we will have a shocking outbreak of monetary and political stability for the entire year.

Canada. No drama. Be thankful.

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Source: https://www.greaterfool.ca/2026/01/28/down-she-goes-6/