So apparently Wall Street has a new favorite phrase, and it’s not “diamond hands” or “to the moon.” It’s “debasement,” and according to Sarah Beaton from Madera Wealth Management, “Everyone’s talking about it. That’s the boogeyman right now.”
Think of it as financial doomsday prepping, but with better suits and more spreadsheets.
What’s This Debasement Thing Anyway?
Here’s the deal: investors are freaking out that governments are basically printing money like it’s going out of style, which could make your dollars worth about as much as Monopoly money eventually. The fancy term is “currency debasement,” but it’s really just inflation’s scary older brother.
The solution? The so-called “debasement trade” – basically throwing money at gold, silver, and bitcoin like they’re the last lifeboats on the Titanic. And honestly? It’s been working. All three have surged over 60% in 2025, making the stock market look like it’s been taking a leisurely stroll while these assets are running a marathon.
Why Everyone’s Panicking Now
Picture your most paranoid uncle who’s been stockpiling canned goods – that’s basically the collective investor mindset right now. And they’ve got some decent reasons:
• The US deficit is about to explode when tax cuts get extended in 2026
• We’re sitting on $38 trillion in debt (yes, trillion with a T)
• The Fed is cutting interest rates, making borrowing cheaper and potentially fueling more inflation
• Tariffs could push consumer prices higher
But here’s the thing – not everyone’s buying the apocalypse narrative. Long-term inflation expectations are still pretty chill, the dollar hasn’t completely tanked, and interest rates are still under 5%. So maybe we’re not quite at Mad Max levels yet.
Can This Party Keep Going?
The optimists think absolutely. UBS strategist Wayne Gordon believes “lower US real interest rates, further USD weakness, and ongoing political twists will drive prices higher.” Ben McMillan from IDX Advisors points out that governments worldwide are hoarding gold like digital dragons, taking it out of circulation.
“Bitcoin is just a digital version of that trade,” he says, which is probably the most succinct explanation of crypto I’ve ever heard.
But then you’ve got the skeptics. JPMorgan’s David Kelly thinks bitcoin is “fraudulent” (ouch) and that gold is basically the participation trophy of investments. His burn on gold? “People talk about long-term assets being ‘as good as gold’ – I can’t think of any long-term asset that’s been as bad as gold.”
Savage, but he’s got a point – since 1980, gold has basically just kept pace with inflation through a lot of ups and downs.
Are We Doing This Right?
Here’s where it gets interesting. Some pros think the debasement trade is like bringing a knife to a gunfight – you’re fighting the right battle but with the wrong weapons.
Kelly suggests betting on European and UK stocks and currencies instead. “If I want to make a bet that the dollar is going to come down – and I do – you could bet on gold, but I’d rather bet on foreign developed country currencies.”
Sarah Beaton agrees, preferring international stocks, Treasury inflation-protected securities (TIPS), and real estate over gold. “I think there are better ways to protect yourself from dollar devaluation – international investing is one of them.”
The Bottom Line
The debasement trade is basically Wall Street’s version of buying a generator before a hurricane – it might be overkill, but if the lights go out, you’ll be glad you did it. Whether gold, bitcoin, and silver are the right generators for this particular storm is still up for debate.
What’s not debatable is that a lot of very smart, very rich people are betting that traditional currencies might not be as stable as we’d like to think. Whether that makes them prescient or paranoid… well, ask me again in a few years when we see how this all plays out.
In the meantime, maybe don’t put your entire 401k into gold coins just yet. But keeping an eye on this trend? Probably not the worst idea you’ll have today.