(Portfolio Review) Currency Wars: Same Movie, Different Ending
Central banks are racing to the bottom. The dollar is breaking. Commodities and gold are your only defense.
When people talk about “currency wars,” it can sound like some abstract battle fought in ivory towers or central bank boardrooms. But it’s not. It’s real, it’s happening right now, and it touches every single investment decision you and I make.
The weak dollar regime rules are simple: no country wants a strong currency for long. Why? Because a strong currency makes exports expensive, slows growth, and tightens the screws on debt. A weaker currency, on the other hand, juices exports and makes debts easier to service. In a debt soaked global economy, that’s the game.
This isn’t theory. It’s history. Look back at the last fifty years — whenever growth stalls, central banks cut rates and weaken currencies. Whenever inflation spikes, they tighten policy and boost their currencies.
And when everyone tries to weaken at the same time? That’s a currency war. It’s a race to the bottom.
That is where we are at today.
The Dollar and the Yield Curve
That brings us to the most important chart right now: the U.S. Dollar Index vs. the Yield Curve.
The top half of the chart shows the dollar ($DXY). Every time the bond market tightens, the dollar rips higher. (Green Arrows)
The bottom half shows the yield curve (the spread between 3-month and 10-year yields). When the curve inverts — meaning short-term rates are higher than long-term ones — it’s a sign of tight money and stress in the system. (Red Arrows)
Here’s the cycle:
Fed tightens → yield curve inverts → dollar strengthens.
Stress builds → Fed eventually eases → yield curve steepens → dollar weakens.
Right now, we’re in stage two. The yield curve has bottomed and is steepening — not because growth is booming, but because the front end (short rates) will get cut. That steepener is a flashing warning: the dollar is in trouble.
What Happens When the Dollar Falls
A falling dollar doesn’t exist in a vacuum. It sets off chain reactions:
Commodities rip. Gold, silver, copper, meats, grains, energy — priced in dollars — tend to move higher when the dollar weakens. It’s math and it’s history.
Emerging markets breathe. A weaker dollar takes pressure off EM debt, which is often dollar-denominated. Money flows outward, fueling rallies abroad.
U.S. assets rotate. Strong dollar regimes favor big-cap U.S. tech and defensives. Weak dollar regimes fuel small caps, cyclicals, and commodity producers.
That’s why when we talk about the commodity supercycle, it’s not just “because demand is strong” or “supply is tight.” It’s also about currency.
A weak dollar is gasoline on the fire of commodity bull markets.
The Currency War Today
Now zoom out. The U.S. is cutting rates. So are central banks around the world — over 160 rate cuts in the last 12 months. That’s not what “inflation is dead” looks like. That’s what panic looks like. Policymakers are racing to the bottom, each trying to weaken faster than the next.
Currency wars aren’t fought with tanks or missiles. They’re fought with printing presses and rate cuts. The losers are savers. The winners are those holding scarce assets.
Where This Ends: Gold
In every currency war, there’s one safe harbor: gold.
Gold isn’t anyone’s liability.
It can’t be printed away.
And when every central bank is busy destroying their currency, gold stands still in real value — which makes it soar in paper terms.
We’ve seen this movie. In the 1970s, aggressive easing and dollar weakness drove gold up 20x. In the 2000s, another weak dollar cycle fueled the last great gold and commodity boom. Today, the pieces are lining up again.
Why This Matters for Investors
Think about it this way:
The dollar was strong during the tightening cycle. That phase is ending.
The yield curve is steepening — that’s the setup for dollar weakness.
Global central banks are cutting at a pace we haven’t seen since 2009 or 2020.
If history rhymes, we’re looking at the early innings of another commodity and precious metals boom. Not the end — the beginning.
So when you hear “the dollar is stable” or “inflation is dead,” look at the chart again. The steepener is the tell. The dollar won’t hold up under looser policy. And in a world of weakening currencies, commodities and gold become the trade.
Bottom Line
The currency war is real, and it’s underway. The U.S. dollar is rolling over as the yield curve steepens. Central banks are cutting like it’s 2009. That’s not a backdrop for deflation. That’s a setup for another global reflation wave.
And in currency wars, there’s only one way to win: own the things they can’t print.
Gold. Silver. Commodities. Real assets.
New trade:
I’m Buying... Before It Doubles Again
Coal is leading again. Our coal basket keeps printing new highs, and the met coal leaders are re-asserting dominance as steel and industrials push the commodity tape.
🔹 Futures: Macro Multi Strategy Portfolio (Leverage)
Audio Review: