The Great Debasement Trade Is Mostly Just Hedge Fund Hype

It now has a formal name: “The great debasement trade.” It’s a catchy term for all manner of investor hairpulling about runaway deficits and the dollar’s threatened primacy — and an apparent flight for refuge that means shunning sovereign debt and related currencies, and snapping up precious metals, crypto coins and other shiny stuff instead.

Finance bigwigs including Ray Dalio, Ken Griffin and Jamie Dimon have all made worried noises. But many are either regular Cassandras or run hedge funds with an interest in talking up so-called momentum trades, where you bet that already overheated assets like gold will keep soaring.