The "Dollar Debasement Trade" Goes Full "Sell America"

Suddenly, the whole world is either selling US assets or threatening to do so. And based on Donald Trump’s recent World Economic Forum speech, in which he demanded control of Greenland and ridiculed multiple globalist scams, “sell America” is a trend with legs.

The main beneficiary? Gold, of course. See this from Kitco:

Gold blasts through $4,800 as “sell America” sentiment picks up

(Kitco News) - The United States government’s aggressive tactics against its European allies, as President Donald Trump continues to threaten the region with tariffs in an attempt to annex Greenland, continue to fuel geopolitical uncertainty and are driving a new round of diversification away from U.S. assets, supporting a significant jump in gold prices.

In his much-anticipated speech at the World Economic Forum in Davos, Switzerland, Trump said that he wouldn’t use military force to annex Greenland; however, he continues to push NATO allies to make a deal for the Arctic island, while European leaders continue to push back.

Some members of the European Union have threatened to sell U.S. Treasurys if the Trump administration moves forward with tariff threats. Danish pension fund AkademikerPension said Tuesday that it is exiting U.S. Treasurys, selling $100 million in bonds because of the U.S. government’s growing debt.

European nations are also threatening to implement their own tariffs on U.S. imports, sparking fears of an escalated global trade war.

Gold has benefited from this volatility as U.S. bond yields have spiked higher, with 10-year yields currently trading at 4.27% and the U.S. dollar index holding around 98 points.

“What is happening now is reminiscent of the hysteria that followed America’s Liberation Day,” said Alex Kuptsikevich, Chief Market Analyst at FxPro. “Stocks, bonds and the dollar all collapsed. Admittedly, to a lesser extent compared to the announcement of global tariffs back then.”

Demand for hard assets in a world filled with uncertainty has propelled gold prices decisively above $4,700, then right through $4,800. Spot gold last traded at $4,866.80 an ounce, up 2% on the day.

“All these geopolitical shenanigans simply serve to reinforce what was already an uber-strong bull case, which is one that I remain a believer in, continuing to view upside targets as $5,000/oz in gold, and $100/oz in silver,” said Michael Brown, Senior Market Analyst at Pepperstone.

Although tensions will ebb and flow, David Morrison, Senior Market Analyst at Trade Nation, said that economic conditions remain extremely fragile.

“The reemergence of tariff threats, the possibility of a new trade war and all-round geopolitical uncertainty is weighing on confidence. The fact that the fresh dangers have all come from the US via the Trump administration has only exacerbated the risks for investors,” he said. “Gold was the standout mover overnight, surging more than 2% to fresh all-time highs just below $4,900. The move reflected a powerful ‘flight to safety’ move as President Trump’s tariff threats reignited investor anxiety and revived the “sell America” narrative. Analysts now openly discuss the prospect of $5,000 gold, underscoring how stretched sentiment has become. While gold has trimmed some of its intraday gains, the broader backdrop remains supportive.”

Ebb and Flow

This is a process of negotiation — though a strange, maybe unprecedented one. That means threats and rash actions will be mixed with deals and relief rallies going forward. So the “sell America” investment thesis won’t play out in a linear way.

We’re better off focusing on the more stable “dollar debasement” play, which is driven by less volatile trends such as deficits, debt, and the never-ending currency printing.

Put another way, focus less on who controls Greenland and more on the approaching currency reset. And keep stacking.