The great debasement trade is mostly just 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.

- MARCUS ASHWORTH

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.

Though I love a good yarn, much of this is hyperbole-so far, anyway-mixed in with a few justifiable fears about out-of-control government spending.

To start from the top, the dollar's doing fine. Having appreciated 3% in the past month, it remains above its 40-year average. It still commands the lion's share of currency trading and global central bank reserves, even if international investors are hedging more exposure. US equities remain in touching distance of all-time highs. The idea of debasement is doing a lot of heavy lifting here.