Trump's Strategy of Depreciating the Dollar: Why Gold and Silver Might Not Be the Best Hedge

In recent hours, former President Trump’s statements about the depreciation of the dollar have triggered significant movements in the markets. Gold and silver, considered traditional safe havens during times of monetary instability, are experiencing notable gains. However, a deeper analysis of the strategy behind these policies reveals a more complex picture than it appears at first glance.

Trump has made his stance clear: “I’m not worried about the fall of the dollar. I believe it’s simply moving toward its fair value. Japan and China have always devalued their currencies. Why not us? I don’t think the dollar has fallen too much yet.” This statement is not accidental; it marks the beginning of a deliberate economic strategy aimed at repositioning U.S. competitiveness on the global stage.

The Depreciation Plan: Targeting Exports and Competitiveness

The depreciation of the dollar is not a weakness in the Trumpist strategy but an economic policy tool. A weaker dollar makes American products—from technology to agricultural commodities—more attractive in international markets. By lowering export prices, it boosts activity in domestic factories, reduces the trade deficit, and creates industrial jobs that Trump has promised as a central pillar of his economic agenda.

This measure aims to address a structural problem: American products, historically expensive due to the strength of the dollar, lose competitiveness against international rivals. The solution involves making the dollar weaker so that “Made in USA” once again signifies competitive prices.

The Offensive Against Powers: China and Japan in Trump’s Radar

Trump argues that other nations have artificially kept their currencies depreciated for decades to flood the U.S. market with low-cost products. His logic is straightforward: “If they play to devalue to gain market share, we will do the same to defend ourselves.”

This view reflects an unleashed competition over monetary depreciation. China and Japan, historically accused of manipulating their currencies, now face a counterpart willing to play by the same rules. The result could be a currency war where multiple powers compete to weaken their currencies simultaneously, each seeking its own competitive advantage.

Liquefying Debt: The Silent Bill for the Rest of the World

There is a deeper financial dimension to this strategy. The United States holds public debt exceeding $38 trillion. When a nation devalues the currency in which it borrows, the real value of that obligation effectively decreases. It is a sophisticated mechanism through which the state shifts part of its fiscal excess burden onto dollar holders around the world.

In other words: the dollar depreciation is a way to “liquefy” debt without explicitly declaring it. Those holding dollars see the purchasing power of their reserves diminish, while the debtor sees the relative weight of their obligations decrease.

Currency War: The Scenario Approaching

Analysts warn that the world could be entering an unprecedented phase of monetary competition. If the United States devalues the dollar, China, Japan, the European Union, and other economic powers will face pressure to do the same. The result: a race where everyone tries to weaken their currency simultaneously, which could lead to extreme volatility and fragmentation of currency markets.

In this chaotic scenario, where do investors seek refuge? Historically, in hard assets: gold, silver, and, in the modern era, Bitcoin.

Hard Assets: Gold and Silver in the Crossfire

Gold appears to be the traditional safe haven, but the reality is more nuanced. While silver often experiences rises alongside inflation expectations, both metals face contradictory pressures in a currency war scenario.

On one hand, widespread monetary depreciation should benefit assets like gold and silver, as they retain inherent value regardless of which currency is weak. However, there is a trap: if all currencies depreciate simultaneously, the “flight to safe assets” effect may be less than expected.

Bitcoin, on the other hand, emerges as an alternative with distinct features: it is not tied to any central bank, cannot be devalued by political decision, and represents a hedge against systemic monetary manipulation.

Conclusion: The New Order of Assets

Trump’s strategy of depreciating the dollar is not just an isolated monetary policy. It is part of a global reconfiguration where multiple actors will compete for their own monetary advantages. In this context, although gold and silver will continue to play defensive roles, their behavior will be much more volatile and less predictable than in past crises.

Investors seeking these metals as a safe anchor might be surprised. The true hedge against a currency war is not a specific asset but a diversified portfolio that includes gold, silver, cryptocurrencies like Bitcoin—currently trading around $70.97K—and other vehicles disconnected from the traditional monetary system. The approaching scenario demands a more sophisticated strategy than simply betting on precious metals.