They Just Gave the Fed Permission to Kill the Dollar

When people picture the collapse of a currency, they imagine panic.

Markets crashing. Politicians shouting on TV. Crowds lining up at banks.

But that’s not how it really happens.

It happens in steps.

With moves that sound “reasonable” in the moment.

And this August, we just saw two of those moves land—back-to-back.

Step One: The Tariff Shock

Washington slapped new tariffs on a list of key trading partners:

• 25% on India

• 20% on Taiwan

• 30% on South Africa

• 39% on Switzerland

• 35% on Canada

On paper, tariffs are sold as a way to “protect domestic industries.”

In practice, they work like a hidden tax.

They make imports more expensive. They disrupt supply chains. And the bill doesn’t go to foreign governments—it lands in the checkout line for U.S. consumers.

It’s inflation, wrapped in a flag.

Step Two: Weak Jobs Data, Nervous Markets

A few days later, the jobs report hit.

It wasn’t catastrophic, but it was soft enough to rattle Wall Street.

Stocks sold off. Bond yields fell. And suddenly, the chorus began: “The Fed should cut rates.”

When rates drop, U.S. assets look less attractive to global investors.

Demand for dollars falls next—and so does the dollar’s value.

The Domino Effect

By themselves, tariffs and rate cuts each put pressure on the dollar.

Together, they amplify each other.

1. Tariffs make imports cost more.

2. Rate cuts make the dollar worth less.

3. Those weaker dollars are then used to buy those more expensive imports.

It’s the perfect setup for inflation to flare back up—right when consumers thought it was cooling.

The public-facing story will be all about “supporting growth” and “managing headwinds.”

But the real story is simpler:

This is a quiet wealth transfer from savers to spenders, from those holding dollars to those holding hard assets.

Tariffs give the Fed a convenient villain to blame for higher prices.

Rate cuts give politicians the short-term boost of an “easier” economy.

And the cost is buried in the slow erosion of your purchasing power.

It Feels Slow—Until It Doesn’t

Like Rome debasing the silver denarius, the damage doesn’t come overnight.

It comes inch by inch.

Prices creep higher. Savings stretch a little less. And every official reassurance—“it’s temporary, it’s manageable”—buys time for the next move.

By the time the average person feels the full impact, it’s already locked in.

Tariffs take your money at the register.

Rate cuts take it in your bank account.

Together, they make sure the dollar you hold today will buy less next year—without a single headline screaming “collapse.”

— Death of the Dollar

P.S. Read this next: The Most Predictable Crisis in History — how the next stage of this playbook is already being written.