Countries are Canceling Treasuries for Gold as US Revaluation Panic Grows
Countries are Canceling Treasuries for Gold as US Revaluation Panic Grows
Sean Foo: 9-20-2025
For decades, the US dollar has stood as the undisputed monarch of global finance, its status as the world’s primary reserve currency underpinning stability and shaping international trade. But what if this reign is quietly approaching its twilight?
A compelling video from Sean Foo offers a deep dive into the accelerating “de-dollarization” trend, painting a picture of a world on the cusp of a profound economic shift.
Sean Foo highlights that the erosion of the dollar’s dominance isn’t a sudden event, but rather the cumulative effect of several powerful forces. Geopolitical tensions, particularly the rising friction between major powers, have incentivized nations to seek alternatives to the dollar-centric system.
Add to this the disruptive force of trade wars – vividly exemplified by the Trump Administration’s tariffs – which have fractured established supply chains and cooled international demand for the dollar.
Simultaneously, persistent fiscal mismanagement within the US, leading to ballooning deficits, has further undermined confidence. When a nation’s financial house isn’t in order, the stability of its currency comes under scrutiny on the global stage.
This isn’t just theoretical; it’s playing out in real-time. China, for instance, is actively spearheading the shift by increasingly conducting its trade and financial transactions in its own currency, the renminbi (RMB), rather than the US dollar.
This move, accelerated by the very trade wars intended to pressure China, demonstrates a strategic pivot away from dollar dependency.
The impact is palpable. The US economy itself is showing signs of instability – think payroll declines, delayed economic data, and increasingly erratic government behavior – all of which erode investor confidence.
The numbers don’t lie: the dollar index plummeted nearly 11% in the first half of 2025, marking its worst performance since the historic collapse of the Bretton Woods system in 1973. This is not merely a dip; it’s a tremor.
Amidst this weakening dollar and a landscape of rising tariffs and projected $2 trillion fiscal deficits in 2025, central banks worldwide are doing something significant. They are actively reducing their holdings of US Treasuries – long considered the world’s safest asset – and conspicuously increasing their gold reserves.
Gold, the ancient store of value, is re-emerging as the preferred safe haven, signaling a historic shift in global financial strategy.
Interestingly, Sean Foo also explores a drastic measure the US government could take: a gold revaluation. Given the vast disparity between the book value and market value of US gold reserves, such a move could unlock nearly $1 trillion in liquidity. This “easy money” could provide short-term relief for US fiscal and monetary policy, fueling inflation-driven GDP growth.
However, this path is fraught with peril. A gold revaluation would be an implicit admission of the dollar’s fragile condition, potentially accelerating its decline.
Furthermore, it could unintentionally strengthen China’s financial position, as China is rumored to hold vast, potentially underreported, gold reserves. The US faces a challenging dilemma: embrace this short-term liquidity and risk undermining the dollar’s long-term status, or avoid it and battle escalating fiscal crises head-on.
The implications of these shifts are profound. We are witnessing a historic recalibration of global reserves, a re-evaluation of dollar holdings, and a resurgence of gold’s role in the new economic landscape. For investors, policymakers, and anyone concerned about the future of money, understanding these dynamics is crucial.
The world is moving on from a singular reliance on the US dollar. The question is no longer if things are changing, but how fast, and what the ultimate destination will be.