The Dollars Decline: What do the numbers say?

The Refinancing Crisis

Over the next several years, trillions of dollars in government debt issued during the low-rate era must be rolled over at today's higher interest rates. When the Treasury issued 10-year bonds at 1% in 2020, those seemed like smart long-term financing decisions. Now, as those bonds mature, the government must refinance them at rates exceeding 4%.

This creates a vicious cycle: higher borrowing costs increase the deficit, which requires more borrowing, which puts downward pressure on the dollar as international investors demand higher yields to hold U.S. debt. 

The mathematics are brutal. Every 1% increase in average borrowing costs adds roughly $350 billion annually to interest expenses once the debt rolls over. At current deficit levels, this forces the Treasury to issue even more debt just to service existing obligations. 

BRICS

While Washington focuses on domestic policy debates, As of 2025, there are 10 BRICS member nations: Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates (UAE). This expanded bloc now represents a significant portion of global economic activity, and they're systematically reducing dollar dependence.

In 2024, well over 90% of trade between Russia and China was carried out in Russian rubles and Chinese yuan. Both countries have also launched an alternative cross-border payment mechanism to the U.S.-dominated SWIFT system.

The strategic implications extend beyond bilateral trade. The BRICS economic bloc is aggressively spearheading a concerted de-dollarization movement. This strategic pivot involves promoting trade in local currencies, developing robust alternative payment systems. Each trade transaction settled in yuan, rubles, or other local currencies represents reduced demand for dollars. 

Safe Haven Assets

The most telling indicator isn't economic theory. It's price action in alternative stores of value. 

In 2025, gold rose over 45%, surging from around $2,600 in January to north of  $3,700, at the time of writing. Central banks are leading this charge. In 2024, global central banks bought over 1,000 tons of gold, a record high. China, Russia, India, and others are all increasing holdings as part of "de-dollarization."

When central banks (the most sophisticated currency managers in the world) are diversifying away from dollars into gold, it signals fundamental concerns about dollar stability.

Bitcoin shattered expectations, achieving a new all-time high of over $124,000. This isn't retail speculation, institutional adoption is accelerating as traditional finance recognizes Bitcoin as a hedge against currency debasement.

The convergence is striking. The dollar is making multi-year lows, while both gold and Bitcoin are making all-time highs. This simultaneous movement in uncorrelated alternative assets suggests broad-based concerns about dollar purchasing power.

The Bottom Line

The dollar's decline could be just another market cycle, or it could reflect structural changes in global finance, fiscal policy, and monetary relationships. 

Refinancing pressures, BRICS alternatives, and safe-haven demand are likely to persist regardless of short-term policy changes. The question for investors is whether these trends will continue. 

Technology could be the saviour for the Dollar. All of the big players are US-based companies and this strategic advantage could prove key for the dollar by potentially reversing the current downtrend that the U.S Dollar Index is experiencing. 

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