Confidence in fiat currencies is eroding fast, as data points to institutional investors abandoning cash at a record pace, amid exploding debt and global uncertainties.
Eroding Confidence In Fiat Currencies
On Thursday, in a post on X, The Kobeissi Letter highlighted the declining confidence in fiat currencies, saying “absolutely no one wants cash right now.”
According to the post, “cash allocation for institutional investors is down to 3.8%,” which it said was the lowest in 12 years, amid a steady decline in the U.S. Dollar throughout this year. The greenback has declined by over 10.27% so far in 2025, primarily owing to the tariffs, trade wars and the recent rate cuts by the Federal Reserve.
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The post also describes several threats and systemic risks that have since emerged for fiscal and monetary dynamics. “The Fed will soon lose its independence,” it says, adding that “rate cuts are coming into stagflation,” while noting that the global debt has increased by $14 trillion, “to a record $337.7 trillion.”
As a result, the post said that investors are being compelled to either buy “stocks at record highs,” pile into gold and silver, or foray into cryptocurrencies.
At the same time, it notes that “corporations are investing hundreds of billions into AI and governments will soon join the AI arms race, prompting more money printing.”
The post reiterated its stance on hard assets as a means to protect against this debasement, saying, “own assets or be left behind.”
Investor’s Preference For Gold Over US Dollar Is ‘Really Concerning’
Billionaire hedge fund manager Kenneth Griffin finds it “really concerning” that investors are starting to view gold as a safer asset relative to the U.S. Dollar.
“We're seeing substantial asset inflation away from the dollar as people are looking for ways to effectively de-dollarize or derisk their portfolios vis-a-vis US sovereign risk,” he said.
Author and personal finance expert Robert Kiyosaki has similarly warned of a Dollar collapse, while urging investors to allocate savings towards gold, silver, Bitcoin and Ethereum.
The U.S. Dollar Index (DXY) currently trades at 98.105 against a basket of other currencies, down 10.27 this year so far.
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