The Dollar Is Getting Smaller! (In More Ways Than One) -

The dollar is getting smaller. 
It's not just that it's rapidly losing purchasing power. It's also losing status on the world stage. 
In this episode of the Midweek Memo podcast, host Mike Maharrey considers both aspects of the shrinking dollar and their ramifications. He breaks down the recent CPI data, noting that it tells only part of the inflation story. Mike also highlights the ongoing global de-dollarization trend through the eyes of some mainstream analysts. 
Mike opens the show by remembering a hockey tournament he played in years ago. 
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<blockquote>
"One of the teams in our division came down from Montreal. The rumor was that they were really good. I mean, they were from Canada. This is hockey. They had to be really good, right? We heard rumors that they scored a lot of goals and their defense was almost impenetrable. But when we got on the ice with them, it turned out they weren’t that good at all. It was a pretty average team. In fact, we beat them by a couple of goals. 
"It just goes to show that sometimes the hype is just that – hype.
"I feel that’s true of the economy sometimes. 
"I keep hearing how great everything is. I mean, just look at the stock market! Look at all the jobs being created! And inflation? Well, they had that under control until the Iranians made oil more expensive.
"And then there is reality. We have a stock market bubble juiced by inflation. We have great job reports that keep getting revised downward months later. By the way, the BLS trimmed 16,000 jobs from February and March with the last data release. And we have inflation – not just from an oil shock."
</blockquote>
Mike notes that a recent Gallup poll reveals Americans' number one worry is affordability. In other words — inflation. 
Mike concedes that the recent spike in energy costs likely has inflation top of mind for many people.
<blockquote>
"But in the first place, you can’t just discount that reality, right? It’s not like the skyrocketing price is less painful because 'well, that’s just because of the war.' I still have to pay the bill.  And in the second place, you can’t argue that it’s only due to oil prices. Monetary inflation is picking up under the surface, and that is going to lead to future price increases, war or no war. In fact, the CPI data released this week makes the 'it’s only oil prices' argument fall a bit flat."
</blockquote>
Mike says no matter how you slice and dice the CPI data, it keeps coming up inflation. He breaks down the April CPI data, noting that about 40 percent of the increase was due to spiking energy prices. But other prices are rising as well. 
<blockquote>
"It’s important to point out that core CPI remains above the Fed’s stated 2 percent target and has been mired in this range for well over a year. This indicates that recent price inflation isn’t merely reflecting an oil shock. There is underlying inflationary pressure in the system."
</blockquote>
Mike also emphasizes that the CPI doesn't tell the full inflation story. 
<blockquote>
"It simply reflects the price movements of a basket of goods made up out of thin air by the number crunchers at the BLS. Yes, this does give some indication of the trajectory of price inflation. However, it tells us little to nothing about the inflation trajectory as economists have historically defined it."
</blockquote>
To do that, we need to look at the money supply. When we do, we discover that the real inflation rate is nearly double the CPI. 
<blockquote>
"Where do I get that? Based on the Fed’s M2 data, the money supply increased from $21.61 trillion in February 2025 to $22.67 trillion in February 2026, a 4.9 percent increase. In other words, we have an actual inflation rate of nearly 5 percent."
</blockquote>
Mike also notes that the Fed has relaunched <a href="https://youtu.be/ipaQAgOCJBk?si=KZkJVhiBnt2qMyns" target="_blank" rel="noopener">quantitative easing (QE)</a>, although they will never utter that word out loud. 
<blockquote>
"If the U.S. and Iran can negotiate a permanent end to hostilities, this oil shock will quickly pass. The pundits and prognosticators will claim the inflation problem is gone. It won’t be. As long as the government keeps creating money, the inflation problem will persist.
"So, that basically means forever." 
</blockquote>
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Mike emphasizes that the dollar is getting smaller, both in the sense that it buys less and less all the time and in the sense that the world is starting to spurn the greenback. 
<blockquote>
"So, I ran across something really interesting the other day. Researchers at Deutsche Bank published a report on de-dollarization, and they came to the conclusion that we might be in the early stages of a fundamental shift in global monetary history. And in the future they envision, the dollar would play a much smaller role."
</blockquote>
Mike points out that this report didn't come from some libertarian think tank. 
<blockquote>
"It was published by an international bank. It doesn’t get much more mainstream than that. When the mainstream starts highlighting stuff I talk about, it makes me nervous, because if they can’t ignore something, it’s probably getting pretty bad."
</blockquote>
The report notes that dollar reserves have dropped from 60 percent to 40 percent, while the share of gold reserves has grown to about 30 percent. 
According to the Deutsche Bank researchers, there was a shift in the 90s, as the U.S. became the undisputed global hegemon. Emerging market banks loaded up on dollars. But today, that trend is reversing.
<blockquote>
"Many countries are now wary of holding dollars. They don’t want to be subject to U.S. foreign policy bullying, and they are concerned about America’s fiscal malfeasance. The 2008 financial crisis was a canary in a coal mine. Aggressive sanctioning of Russia after it invaded Ukraine may have been the final straw."
</blockquote>
The Deutsche Bank analysts say, "The end of history has itself come to an end, with significant implications for gold and the dollar, which are becoming increasingly apparent.”
<blockquote>
"This is a fancy way of saying that if de-dollarization and EM gold accumulation continue, it could drive the gold price even higher."
</blockquote>
Mike emphasizes that this could signal a fundamental shift in the global monetary order, with the dollar playing a decreasing role. 
<blockquote>
"As I’ve mentioned over and over, even a modest de-dollarization spells big trouble for the U.S. economy."
</blockquote>
The U.S. needs the world to need dollars. 
<blockquote>
"The only reason the U.S. can borrow, spend, and run massive budget deficits to the extent that it does is the dollar’s role as the world reserve currency. It creates a built-in global demand for dollars and dollar-denominated assets. This absorbs the Federal Reserve’s money creation and helps maintain dollar strength despite the Federal Reserve’s inflationary policies.
"But what happens if that demand drops?
"A de-dollarization of the world economy would cause a dollar glut. The value of the U.S. currency would further depreciate. At the extreme, global de-dollarization could spark a currency crisis. You and I would feel the impact through more price inflation, eating away at the purchasing power of the dollar. In the worst-case scenario, it could lead to hyperinflation."
</blockquote>
Mike reiterates that this is why you want to hold real money — gold and silver. They are not subject to government devaluation and will help preserve your wealth over time. Mike wraps up the show, urging listeners to call 800-800-1865 while gold and silve prices are a bit lower. 
<blockquote>
"This is a buying opportunity."
</blockquote>
<h2>Articles Mentioned During the Show</h2>
<a href="https://www.moneymetals.com/news/2024/01/12/common-definition-of-inflation-you-hear-today-is-wrong-government-propaganda-002925">The Common Definition of "Inflation" Is Wrong! It's Just Government Propaganda</a>
<a href="https://www.moneymetals.com/news/2026/05/10/inflation-is-americans-biggest-financial-worry-and-its-not-even-close-004905">Inflation Is Americans' Biggest Financial Worry, and It's Not Even Close</a>
<a href="https://www.moneymetals.com/news/2026/05/05/the-silver-market-has-stabilized-but-remains-at-risk-for-additional-squeezes-004890">The Silver Market Has Stabilized But Remains at Risk for Additional Squeezes</a>

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