The U S Dollar - A Causality Question

 12/30/2025

Jennifer Sor blames the usual punching bags, the FED and Trump 

The link was from yahoo but does not seem to open, The author notes a 10$ 2025 in the dolar blaming as usual the FED  and Trump tariffs. Let's look at the actual graphs of the dollar and gold. 

The dollar has declined 10% this year but the actual graph suggests a different reason for the decline.

Prior to the 2024 election the buck was trading at 101.  In  November this year it  was right where it was a year ago-100 more or less.  The media always tosses causality around as though it can magically determine the reason things happen. I suggest that the buck rose hoping Trump, having won, would repair the damage of the Biden years, ie too much spending. Hope quickly faded putting us right back where we were, and that is my take on what happened. Trump says he likes the weak dollar as al our goods are cheaper in terms of foreign currencies and easier to sell, tourism will improve. Well if that were true Argentina would be a powerhouse, its currency has been the weakest of this Hemisphere for some time.  Mexico suffers from this malady as well which is why Mexican billionaries do not leave their money in Mexico. 

Here is another perspective, let's overlay gold to the dollar.

 

 I hear all sorts of nonsensical explanations for the rise of gold like it is needed for NVDA's chips. 

A better reason is that people are exchanging paper dollars for gold, look at the chart. 

Here is the five year longer view

 In 2021 the dollar and gold were equal. The dollar raced ahead, ten corrected but gold slowly began gaining ground.  In early 2025 gold won and the dollar retreated. Gold is ahead of itself and will likely correct after the big parabolic run. Yesterday Ed Yardeni predicted 10,00 gold by 2029 yet seemed oblivious to what that might mean for our currency. 

The 10% dollar drop means the stock market gain of 18% was not as strong as it appears, it was just stocks readjusting for the loss of purchasing power.