US dollar hegemony is quietly undermined by the high tariff walls it has built! ！
The elite in suits at UBS have recently spoken out: the current wave of tariff increases in the US seems to be aimed at other countries, but it could ultimately backfire and make the dollar itself 'weaken'!
Tariff increases = Imports become expensive = Inflationary pressure in the US exacerbated: When the Americans impose tariffs on our goods, who ultimately pays? It's the American public and businesses! Prices go up, making it even harder to keep domestic inflation down. The Federal Reserve may originally want to lower interest rates to stimulate the economy, but seeing inflation rise again, they might be forced to keep interest rates high for longer, or even raise them further! High interest rates may seem to attract capital back in the short term to support the dollar.
High interest rates are a 'double-edged sword', hurting both others and oneself: Prolonged high interest rates can severely drag down the US economy! Businesses find it difficult to borrow and expand, and the public faces immense pressure from mortgages and car loans, leading to suppressed consumption. If the economy is 'choked' to the point of struggling to breathe or even recession, who will still have faith in US assets? The foundation for a strong dollar in the long term will be shaken.
The global 'de-dollarization' undercurrent is accelerating: The US often uses dollar hegemony as a sanction tool, and now imposes tariffs for trade protection, don’t other countries have doubts? Countries will accelerate their search for alternatives to the dollar! Whether it's increasing local currency settlements, accumulating gold, or even exploring digital currencies, all are weakening the dollar's absolute dominant position as a global reserve and settlement currency. As demand decreases, the value of the dollar will naturally be under pressure.
Potential long-term weakening of the dollar: If UBS's analysis proves correct, the long-term trend of the dollar will decline, then the prices of mainstream cryptocurrencies priced in dollars will theoretically be supported.
Narrative of 'de-dollarization' reinforced: The attributes of Bitcoin as 'digital gold', 'censorship-resistant', and 'non-sovereign' become stronger in the context of the global search for alternatives to the dollar! When large funds allocate, they may diversify a small portion of their positions from traditional 'safe-haven assets' into the cryptocurrency space.
Opportunities amid increased volatility: During policy game periods, market sentiment will inevitably be sensitive, leading to increased volatility. This presents opportunities for seasoned traders who are good at capturing swings, but it is also riskier for newcomers. Be cautious with risk management, don’t go all in!
Tap the avatar to follow me and never miss any first-hand information updates! Let's join the feast of the bull market!
