Investors are buying gold, bitcoin, and shares in what's being called the "debasement trade" — a strategy driven by concerns about government debt, currency weakness, and central bank independence.
The debasement trade refers to investors moving away from fiat currencies like the dollar toward "harder" assets that might protect against inflation. As reported in The Guardian, this movement has accelerated amid growing anxiety that governments won't or can't control their borrowing. The Trump administration's fiscal policies are pushing the United States' national debt even higher than its current $37 trillion. Central banks are cutting interest rates despite above-target inflation.
Gold has surged 50% this year to reach $4,000 an ounce for the first time. Bitcoin has climbed more than 20% since January, touching $125,000. Meanwhile, the US dollar has dropped approximately 9% against other currencies.
Goldman Sachs predicts gold will continue rising, forecasting $4,900 per ounce by the end of 2026. However, many experts warn these asset price surges mirror the late 1990s dotcom boom — suggesting that what goes up dramatically may eventually come down just as spectacularly.
