20th June 2025 – (New York) The scent of Nebraska corn hung heavy over Omaha’s CHI Health Centre last May as Warren Buffett, presiding over his final Berkshire Hathaway annual meeting as chief executive, delivered a valedictory address that shook global markets to their foundations. With characteristic plainspokenness cutting through the usual corporate platitudes, the 94-year-old oracle issued a verdict more alarming than any quarterly earnings miss: “We wouldn’t want to own anything denominated in a currency going to hell.” This pronouncement, reverberating through trading floors from London to Hong Kong, transcended mere financial analysis—it constituted an epitaph for the era of unquestioned dollar supremacy. Buffett’s unease stems not from cyclical economic weakness but from structural rot: the United States’ $34.9 trillion debt mountain growing at $1 trillion every 100 days, the self-inflicted wounds of trade wars he branded “an act of folly,” and a political culture prioritising short-term electoral gains over fiscal sustainability. As Berkshire executes a ten-quarter strategic retreat—divesting $134 billion in equities whilst amassing a $347 billion cash fortress—Buffett’s actions telegraph what his words make explicit: the bedrock of the post-war financial order is cracking.
The mechanisms of this unravelling reveal alarming velocity. Since January, the US Dollar Index has shed 8% against major currencies, accelerating after Moody’s May downgrade stripped America’s last pristine credit rating. This depreciation isn’t market whimsy but mathematical inevitability. The Congressional Budget Office projects annual deficits exceeding 7% of GDP through 2034—levels historically associated with emerging market crises—even before accounting for Donald Trump’s proposed $5 trillion tax cut extension. Compounding the fiscal incontinence, Trump’s 145% tariffs on strategic Chinese imports have triggered reciprocal measures, igniting inflation across industrial supply chains. May’s benign CPI reading, celebrated by equity markets, constitutes a mirage: the full impact of trade barriers won’t permeate consumer prices until late 2025, precisely when the Federal Reserve contemplates rate cuts. This toxic convergence—debasement through quantitative easing, consumption taxation via tariffs, and diminishing global confidence—creates what Bridgewater Associates terms “the perfect dollar devaluation storm.”
Buffett’s response reveals a roadmap for capital preservation in this new paradigm. His uncharacteristic move into Japanese yen-denominated debt—funding positions in Marubeni and Mitsubishi—wasn’t mere arbitrage but a structural hedge. “It’s the first time we’ve sought currency-matched funding abroad,” he acknowledged, noting Berkshire may hold these positions “50 or 100 years.” This yen pivot exploits Japan’s unique monetary position: despite carrying the world’s highest debt-to-GDP ratio, 90% of its bonds are domestically held, insulating it from capital flight. Meanwhile, Berkshire’s record gold accumulation through subsidiaries like Newmont Corporation signals retreat from fiat instruments entirely. The metal’s 40% surge since 2023 reflects deepening institutional unease, with J.P. Morgan forecasting $4,000/ounce by 2026 as central banks accelerate reserve diversification. China’s gold reserves alone expanded by 281 tonnes last year whilst its US Treasury holdings fell to $770 billion—a 14-year low.
Individual investors face acute vulnerability. The dollar’s decline acts as a stealth tax, eroding purchasing power whether manifested in pricier European holidays or costlier semiconductor imports. Conventional inflation hedges prove insufficient: real estate carries illiquidity risks during capital flight (“When properties falter, you inherit tenants’ despair,” Buffett cautioned), whilst equities face earnings headwinds from input cost inflation. True defence requires embracing what Morgan Stanley dubs “post-dollar assets.” Physical gold within tax-advantaged vehicles like American Hartford Gold’s IRAs provides non-correlated protection, particularly when securitised products like GLD face potential settlement risks during market seizures. Art investment platforms such as Masterworks democratise access to Picassos and Basquiats—asset classes boasting 14.1% annual returns since 1995 with zero correlation to currency markets. Most compellingly, inflation-linked real estate through First National Realty Partners offers triple-net leases with Whole Foods and Kroger, embedding rent escalators directly tied to CPI whilst avoiding operational headaches.
The geopolitical dimension magnifies these financial tremors. Washington’s weaponisation of dollar clearing via SWIFT sanctions has catalysed parallel payment systems—China’s CIPS now processes 20% of its cross-border yuan trade, whilst BRICS’ Contingent Reserve Arrangement threatens IMF dominance. When Buffett lamented “nations holding nuclear arsenals shouldn’t provoke envy through triumphalism,” he highlighted the security paradox: America’s financial belligerence accelerates the very dedollarisation it seeks to prevent. Recent oil trades between India and Russia settled in yuan, Saudi Arabia’s opening of RMB liquidity facilities, and Brazil’s adoption of Chinese payment rails collectively signal that the petrodollar’s twilight is imminent. As Ray Dalio observes, “Reserve currency transitions historically involve 15-20 year cycles; this one commenced in 2020.”
Yet Buffett’s pessimism contains a critical paradox: his enduring faith in American equities. “This remains the finest soil for enterprise,” he affirmed, even whilst preparing for currency turmoil. This apparent contradiction resolves through sectoral discernment. Companies with unassailable pricing power—Berkshire’s retained holdings in Coca-Cola and American Express—can pass input cost inflation to consumers. Businesses with territorial diversification, like Apple’s yuan-denominated revenue streams, function as natural currency hedges. Most critically, infrastructure assets—from Burlington Northern’s rail networks to Berkshire’s energy utilities—hold intrinsic value transcending monetary abstraction. Herein lies the ultimate lesson from Omaha: the dollar’s reckoning needn’t signal America’s decline, but rather the demise of its exorbitant privilege. Survival demands recognising that the age of dollar primacy is concluding—not with a hyperinflationary bang, but through the relentless friction of compounding fiscal irresponsibility. As the maestro exits the stage, his final counsel echoes: abandon currency idolatry, seek bedrock value, and remember that financial hell is paved with political promises.