China showcased its military might and growing alliance with U.S. adversaries including Russia, North Korea and, at least for now, India. But that show of force is not the only threat posed by today’s axis of evil.
Equally alarming is the insidious attack by China and its allies on the U.S. dollar, ringing alarms across global financial markets. China and other central banks have been stockpiling gold, diversifying their reserves away from U.S. government bonds, driving gold prices higher and Treasury yields up. Their allies have followed suit.
Does it matter to most Americans? Yes. A weaker dollar means traveling abroad and imported goods are more expensive, even without tariffs. Higher interest rates inflate borrowing costs.
Morgan Stanley reports, “The value of the U.S. dollar against other currencies dropped about 11% in the first half of this year, the biggest decline in more than 50 years, ending a 15-year bull cycle.” The investment bank, writing last month, also noted that, “The U.S. dollar ended the first half of 2025 with its biggest loss since 1973,” and predicts more deterioration over the next 12 months.
