Uncle Sam seems not to care about the sinking value of his own currency— a strong reason to exchange dollars for gold.
During fiscal year 2025, the U.S. budget deficit was $1.8 trillion. That pushed the total U.S. federal debt load up to $37.6 trillion, 124 percent of the nation’s gross domestic product.
If you ran your finances like the government, you’d be bankrupt. But what does Uncle Sam do? Keep printing money! This is known as monetizing the debt, a practice that causes debasement of the dollar.
As the Federal Reserve Bank of St. Louis states on its website: “If the government prints too much money, people who sell things for money raise the prices for their goods, services and labor. This lowers the purchasing power and value of the money being printed. In fact, if the government prints too much money, the money becomes worthless.”
In addition to rapid dollar printing, another factor driving down the currency is the decline in U.S. interest rates, which is reducing the attractiveness of U.S. fixed income investments, leading international investors to seek returns in non-dollar-denominated assets.
Even with inflation well above the Federal Reserve’s target, the central bank has been cutting interest rates. And the Fed is likely to continue reducing rates once a new chair—handpicked by President Trump—begins leading the central bank after Jerome Powell’s term as Fed chair ends in mid-May.
As the federal government gradually undermines confidence in the U.S. dollar, its standing in international markets sinks. In 2025, the dollar fell nine percent against a basket of major foreign currencies. Major global investment firms expect the dollar will keep dropping in 2026, including Goldman Sachs, Deutsche Bank, and Morgan Stanley, which sees a decline of six percent. All three banks are bullish on gold.
