Written 17 September 2026 (AEST). This is the continuation I promised in January 2024, when I closed The Demise of the US Dollar — A Prophecy For Its Death! with two words: “TO BE CONTINUED.” I said I had a wide arsenal of notes. Here is what the arsenal has been loaded with since.
The prophecy was never about the exchange rate
Let me clear the first objection before it is raised. The dollar has not collapsed. The DXY did not go to zero. Anyone waving a strong-dollar chart to say the prophecy failed has misread it — deliberately or otherwise. I never argued the dollar would lose its price on a given Tuesday. I argued it would lose its monopoly as the world’s trusted store of value — that the fractional, manipulated, bureaucratically-corrupted machinery I described in 2024 would slowly force the world to hold something the machinery could not print.
That is not a forecast anymore. It is a receipt.
What has changed since January 2024
Consider what the two years since that piece have delivered:
- Gold went from a nervous ~$2,000 to a record $5,595 an ounce (29 January 2026), and even after cooling to around $4,340 it has now passed its inflation-adjusted 1980 high. Central banks — the most informed holders on earth — have been the buyers, accumulating roughly a thousand tonnes a year and, for the first time since 1996, holding more gold than US Treasuries.
- The US 10-year yield reached ~5.02% — its highest since 2007 — and the 30-year sits near 5.25%. The market is charging the issuer more to hold its paper, not less.
- The Federal Reserve was forced to hike on 16 September 2026, to 3.75–4.00% — its first increase since 2023 — into an oil-led inflation it cannot fix with a demand tool (August CPI: gasoline +27.4% year-on-year). A central bank tightening into a supply shock is not strength. It is a tool that has run out of room.
The confirmation no dollar bull wants to discuss
Here is the part that should end the argument. The single loudest vote of no-confidence in the dollar-as-store-of-value has been cast by the United States government itself.
In March 2025 the executive branch established a Strategic Bitcoin Reserve, and the state is now the largest known sovereign holder of Bitcoin — roughly 328,000 coins. In 2026 the American Reserve Modernization Act went further, writing Bitcoin accounting into the Exchange Stabilization Fund — the very vault the Treasury uses to defend the dollar. Read that twice. The institution that issues the reserve currency is quietly parking value in a fixed-supply asset it can neither print nor debase, inside the fund whose job is to stabilise the currency it is hedging against.
When the debaser starts hedging its own debasement, the prophecy is no longer contrarian. It is policy.
The honest caveat — structural, not this Tuesday
I will hold myself to the same discipline I demand of everyone else. In the near term, a hawkish Fed under Chair Kevin Warsh and a 5% yield are dollar-supportive: capital chases the carry, and the DXY can stay firm for quarters. If you short the dollar on the exchange rate this week on the strength of this argument, you may be right about the disease and wrong about the timing — and timing is what settles the account. The demise I am describing is structural erosion of trust, measured in gold at records, in central banks rotating out of Treasuries, and in the issuer itself reaching for Bitcoin — not in a single currency cross. Do not confuse the two. That confusion is exactly how the well-meaning lose money being right.
What I am watching from here
Three tells. First, whether foreign official demand at Treasury auctions keeps thinning while the reserve mix keeps rotating toward gold and now Bitcoin. Second, whether the Fed’s own dot-plot second hike arrives while core inflation is falling — the signature of a tool aimed at the wrong cause. Third, whether the Bitcoin-in-the-ESF idea moves from accounting footnote to actual allocation. That last one deserves its own series, and it is coming…
Provenance: the argument above is not reverse-engineered from the headlines. It sits on top of dated working notes from my own desk — THEOMEGASWARMER intermarket read on the oil shock and yield pressure (8 September 2026), a US-yields “potential Federal Reserve default” audit (10 September 2026), and a strategic-reserve note on Bitcoin inside the Exchange Stabilisation Fund (10 September 2026) — written before this article, not after.
Related reading on this site: The Demise of the US Dollar (2024) · Hike It Double? · The Demise of Monetary Policy · The Algorithms Don’t Wait for the Committee.
References: Federal Reserve (2026) FOMC statement, 16 September — https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm.
U.S. Bureau of Labor Statistics (2026) Consumer Price Index — August 2026, 11 September — https://www.bls.gov/news.release/cpi.nr0.htm. The White House (2025) Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile, 6 March.
U.S. Congress (2026) American Reserve Modernization Act of 2026 (H.R.8957) — https://www.congress.gov/bill/119th-congress/house-bill/8957/text. Trading Economics (2026) United States 10-Year Government Bond Yield and Gold.
Opinion and market commentary of #thealphaswarmer. Not financial advice.