“I’m a person who likes a strong dollar, but a weak dollar makes you a hell of a lot more money.”
-Donald Trump
October 13, 2025 — On Friday the trade war was back on the front page. CNN:
Dow tumbles nearly 900 points after Trump reignites trade war between the world’s two largest economies
US stocks closed sharply lower Friday after President Donald Trump threatened to hike tariffs on imports from China, reigniting fears of a trade war that rocked global markets earlier this year.
Fortune elaborates:
Trump to hike China tariffs to 130% and impose software export controls next month, as trade war reignites to nearly ‘Liberation Day’ levels
The announcement on Friday led to $2 trillion in losses for investors. But not to worry. Dow futures are up this morning. Why? POTUS says “everything will be fine with China.”
“Don’t worry about China, it will all be fine!” quoth the president. “Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The U.S.A. wants to help China, not hurt it!!!”
Any resemblance between this and serious economic management is purely coincidental. China and the US are the two largest ‘traders’ in the world. The former exports. The latter imports. Any interference will be bad news for just about everyone.
But the markets (at least this morning) seem to think the latest Trump move is just theater or a passing tantrum. Many mention the ‘TACO’ trade (Trump Always Chickens Out) as a way to understand and profit from the latest outburst. ‘Buy the dip,’ they recommend.
Meanwhile, we were at a financial conference in Dublin this weekend, hosted by International Living. At it, Jeff Opdyke did a good job of laying out the real threat to investors.
“The US dollar has fallen more in 2025 than any time in the last 50 years,” he said. “The amount of US debt has soared…and is now at $37.5 trillion. And while the debt was going up, so was the interest rate that the feds had to pay on it. At an average of 3.75%, it’s twice what it was just five years ago.”
“This is the real problem for the US,” he says.
Employment, household debt, housing, and the dollar itself — all are headed down. And as the dollar falls, prices on imports have to rise.
“There is no way America can ever be self-sufficient in bananas, for example. We have to buy them from overseas. And we pay in dollars. As the dollar goes down, they’re going to be more expensive.”
The idea behind the tariffs is to drive manufacturing back to the US. But, says Jeff:
“You can forget about bringing most manufacturing businesses back to America. The average hourly wage in Vietnam is $3.50. There is no way we’re going to compete with that. We don’t want to.
“And the dollar is falling because more and more foreigners don’t want it. For the first time in 50 years, also, foreign central banks have less than 50% of their assets in dollars. They’re selling dollars, not buying them.”
But the major reason the dollar is going down, says Jeff, is that the Trump team wants it to go down. They believe a lower dollar would make US manufacturing more competitive and lower the real value of US debt.
They’re right about that, in theory, but a falling dollar also makes it more expensive to finance new borrowing. Foreigners don’t like to see the value of their assets go down.
They own trillions in US assets…notably US government bonds. And it looks like the administration is doing everything it can — including whimsical tariff threats — to make the value of the US dollar and US bonds go down.
“That is why gold is going up,” says Jeff.
The feds need to finance trillions in new debt, as well as refinance trillions more in existing debt, in a world where the dollar is falling and interest rates are rising. No matter what they say, they have little alternative; they have to ‘print’ more dollars. Or default. Either way, gold will go up.
“But aren’t you worried about a pullback in the gold market?” asked a friendly voice,
Came the answer:
“Gold will probably go to $10,000 before there is a serious correction.”
We’ll see.
Regards,
Bill Bonner
P.S. from Addison: If our forecast pans out, there’s still plenty of opportunity in gold and silver in the years ahead. Any pullback in the space in the coming weeks is a good opportunity to position yourself accordingly.
Confidence in the dollar is shaky, at best. Ian King and I have joined forces to discuss what we see as a Dollar 2.0 unfolding…
In fact, later this week, we’re dedicating a special Grey Swan Live! This Thursday, October 16 — Dollar 2.0: The Final Chapter.
October 21, 2025, could go down as one of the most important dates in American financial history. On that date, a rare, federally mandated event could trigger the most powerful wealth shift in more than 80 years.
If events unfold as we expect, it could mean a $20 trillion shift in assets — and rewrite the rules of money for every individual investor.
For select investments, we expect 12X gains before 2030. Potentially more.
This is a critical point in monetary history.
Like many of the Trump administration’s policy initiatives, we’re expecting these changes to rewrite the rules of banking, global investing and the fate of the U.S. dollar as the world’s reserve currency.
We’re breaking it all down in a special Grey Swan Live! video presentation this Thursday at 1 p.m. ET.
To ensure you receive your presentation, simply click here to reserve your spot. We’ll send you new information and reminders throughout the week.
If you’d like, you can drop your most pressing questions right here: Feedback@GreySwanFraternity.
