The Dollar is Dead - by Nic Pavao - Math Meets Money

Gasp. What did he say?! No more Hamiltons for morning Starbucks? No Benjamins for blackjack at Bally’s?! Say it ain’t so.

If you know me personally, you’ve probably heard me spitballing versions of this since we lit the dollar on fire during COVID.

But the last four months have crystallized something for me: this isn’t just some long arc of decline we’ll debate from our rocking chairs. It’s happening. It’s happening now. It will absolutely happen within our lifetime, and I expect likely in the next decade.

Before I throw down my 8-Mile-style rap battle against the greenback, I want to call out that there are many dissenters. Plenty of people, who are more credentialed than me on this topic, think I’m totally wrong. Over the last few years I’ve floated this theory in conversation with investment bankers, Fed economists, Treasury staffers, economic historians — all people with front-row seats to the fiscal drama, who in principle should know better.

Without fail, they give me a tight-lipped smirk that says: “cute theory, but the dollar’s not going anywhere”, citing the shear volume of sovereign reserves denominated in USD, the dependence of the global financial system on T-Bills and long-dated treasuries, the lack of a legitimate competitor that can meet the sheer volume of international trade and FX swaps.

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