The Dollar Is Dying and Nobody Wants to Call the Funeral
The Dollar Is Dying and Nobody Wants to Call the Funeral
We're watching the death of monetary order in real time. Not metaphorically. Not as a thought experiment for late-night traders. Actually.
Gold is trading above $5,500 an ounce. Silver breached $110. The S&P 500 closed negative on the same day the FOMC held rates steady and the Fed chair delivered measured remarks about "data dependency." The Nasdaq dropped 1.6% on January 29th despite Meta rallying 9% and IBM jumping 7.4%. Microsoft, which beat earnings, fell 11%.
There's something profoundly wrong with this picture, and it has nothing to do with whether earnings came in hot or cold.
History doesn't move at the pace we expect. For decades, the post-Bretton Woods dollar system—the one that replaced gold in 1971—has seemed permanent. Inevitable. Like gravity. It structured the entire apparatus of global finance: oil priced in dollars, Treasury bonds as the risk-free rate, the Federal Reserve as the lender of last resort, central banks around the world holding $7+ trillion in dollar reserves.
That system is fragmenting. Not tomorrow. Now.
The geopolitical events of January 2026 are instructive mostly because they're real. Venezuela's Nicolás Maduro captured on January 3rd. The U.S. seizing Venezuelan oil revenues under Executive Order 14373. Iran conducting live-fire drills in the Strait of Hormuz while the U.S. Navy deploys with orders to act "with speed and violence, if necessary." The Greenland "crisis"—and whatever you make of that dispute, it signals that global order is back on the table in ways it hasn't been since the Cold War ended.
These aren't market events. They're civilizational events. And they're breaking the fundamental assumption that's held the dollar system together: that American power can be taken for granted.
When that assumption cracks, capital does what it always does. It seeks certainty. Right now, the only thing that looks certain is gold.
Central banks understand this more clearly than anyone. The People's Bank of China bought gold for 13 consecutive months through November 2025. Japan's buying. Russia's been accumulating since 2022. The Polish central bank just committed to buying another 150 tonnes despite prices at record levels. One of their officials stated it plainly: "Stability and credibility are more important than the course."
That's a central banker saying the same thing every major reserve bank is quietly saying: we don't trust dollars anymore. We're diversifying.
This is what de-dollarization looks like when it's actually happening. Not as BRICS+ currency speculation. Not as some fringe theory. As systematic, methodical central bank purchasing that's averaging 60 tonnes per month—nearly four times the pre-2022 average of 17 tonnes.
JPMorgan's gold price forecast has gold at $5,400 by Q4 2026. Goldman raised its December 2026 forecast to $5,400, up from $4,900. These aren't contrarian calls anymore. They're mainstream. The banks are saying gold can go higher.
And here's the kicker: these forecasts assume tariffs and geopolitical risk remain in place. They assume the structural headwinds stay structural. They're not factoring in a mean reversion to "normal" because normal doesn't exist anymore.
Meanwhile, the technology sector is experiencing what economists politely call a "revaluation."
Microsoft spent $37.5 billion on capex in Q4 alone. That's capital that doesn't generate revenue. It creates data center assets. Those assets cost money to carry, depreciate over time, and compete with stock buybacks and dividend payments for cash flow. The more successful Microsoft's cloud business becomes, the more it needs to spend to maintain its position.
This is the structure of the new economy: growth without profitability's traditional relationship to valuation.
Intel, Oracle, Salesforce all fell yesterday despite or because of their earnings. The market is asking a question these companies can't answer: at what point does the capital intensity of the AI buildout consume all available profit?
Meta is the exception, not because it's exempt from this dynamic, but because it telegraphed the problem months ago. The stock crashed in October. It's already digested the reality that capex will be massive in 2026. Yesterday's 9% rally happened after the market had already priced in the disaster. That's a completely different trade.
Tesla fell because it reported a 3% revenue decline—its first annual decline ever. First. Ever. For a 20-year-old company in an industry that was supposed to be the future. The stock added 2% anyway because the bar had been set at "total collapse." When you get "merely declining," it counts as a win.
This is what happens when structural uncertainty replaces orderly markets. The Fed's job just became impossible. The central bank is supposed to navigate between inflation and unemployment. Today it needs to navigate between a geopolitical order that's dissolving, an AI buildout that might crater, a fiscal deficit that's mathematically unsustainable, and a labor market that's either stable or weak depending on which data you read.
Powell said nothing controversial on Wednesday. He held rates. He said inflation remains elevated and the outlook is uncertain. Two Fed governors voted for a cut. He effectively signaled that the Fed has no idea what's happening and is waiting for clarity that probably won't come.
That's the definition of a central bank that's lost control of the narrative.
The dollar index touched four-year lows this week. Trump explicitly dismissed that slide as unimportant. He's right, but not in the way he means. It's unimportant because the dollar's reserve status isn't being challenged by any single currency anymore. It's being challenged by assets. Gold. Crypto. Sovereign wealth diversification. The slow, patient reallocation of capital toward things that aren't someone else's liability.
Here's the hard part about structural change: you can't see it while it's happening. You only see the price action—gold up $400 from last quarter, silver up from $55 to $110 in a year—and you rationalize it as irrational exuberance or safe-haven demand from a temporary crisis.
Except the crises keep coming. Venezuela. Iran. Trade wars with Europe. A Powell investigation that could accelerate his replacement. The possibility that Trump's preferred Fed chair might be even more dovish than Powell, which would mean dollar weakness, which would mean gold higher.
When you can't see the structure, you watch the price. And the price is telling you something very clearly: an era is ending.
The tech earnings will keep coming. Amazon, Google, and Apple report next week. Some will beat. Some will miss. The ones that miss will get crushed because the market is too uncertain to grade on a curve. The ones that beat will barely move because the gains are already priced in and what matters now is whether their capex schedule looks crazy or merely aggressive.
And none of it will matter as much as what happens in the Middle East. Or whether Trump actually follows through on Europe tariffs. Or whether the Fed gets new leadership and what that leadership decides about the dollar.
The markets are repricing the entire architecture of global finance in real time. Earnings have become a sideshow. Rates are on pause. The only question that matters is: which assets will still hold value when the order that's currently dying finishes the process?
Gold has an answer to that question. The dollar doesn't. Not yet.
The market is voting accordingly.
Next week: The final earnings push arrives. Watch what happens to margins—not growth.