The Dollar is shrinking and Gold could explode higher

In the latest episode of the Money Metals Midweek Memo, host Mike Maharrey challenged the optimistic mainstream narrative surrounding the U.S. economy, arguing that beneath strong headline numbers lies a far more troubling inflationary and monetary reality.

Maharrey opened with a personal hockey story about an overhyped Canadian team that ultimately proved ordinary on the ice, using it as a metaphor for today’s economy. Americans keep hearing that the economy is strong, inflation is cooling, and the labor market remains healthy. But according to Maharrey, the real-world data increasingly tells a different story.

He pointed to recent downward revisions from the Bureau of Labor Statistics, which trimmed 16,000 jobs from February and March employment data, as another example of economic headlines failing to match reality. Meanwhile, a recent Gallup poll found that 65% of Americans identified rising costs and affordability as their biggest financial concern, underscoring how deeply inflation continues to affect households.

CPI data signals inflation pressures are growing

Maharrey spent much of the episode analyzing the latest Consumer Price Index data, arguing that inflation is broadening well beyond energy costs tied to geopolitical tensions involving Iran.

April CPI rose 0.6% month-over-month after a 0.9% increase in March, pushing annual headline inflation to 3.8%, the highest level since May 2023. Energy prices accounted for roughly 40% of the increase, with the energy index jumping 3.8% in a single month and gasoline prices surging 5.4% in April alone. Compared to a year earlier, gasoline prices were up 28.4%.

But Maharrey emphasized that inflationary pressures are spreading into other areas of the economy. Core CPI, which excludes food and energy, rose 0.4% in April, bringing annual core inflation to 2.8%. Annualized, that monthly pace would imply roughly 4.8% inflation — far above the Federal Reserve’s stated 2% target.

Other categories also showed persistent upward pressure. Food prices increased 0.5% during the month, shelter costs rose 0.6%, and services excluding energy climbed another 0.5%. Producer Price Index data released the same week further reinforced the trend. Producer prices rose more than 1% month-over-month, while core producer prices still increased 0.6% even after stripping out food and energy. Maharrey noted that producer prices often serve as a leading indicator for future consumer inflation.

According to Maharrey, these figures undermine the argument that inflation is merely the result of temporary oil shocks.

“Inflation” is more than rising prices

A major theme throughout the episode was Maharrey’s insistence that most Americans misunderstand inflation itself.

He argued that CPI is not inflation, but rather a symptom of inflation. Historically, economists defined inflation as an increase in the supply of money and credit, not simply higher consumer prices. Rising prices are merely the visible consequence of monetary expansion.

Maharrey also criticized the methodology behind modern CPI calculations, claiming formula changes implemented during the 1990s systematically understate actual inflation. Using older CPI formulas from the 1970s, he argued, current inflation would likely measure closer to 6% or 7% rather than the official 3.8%.

He cited electricity prices as an example, noting that electricity costs have reportedly climbed 50% over the past five years, or roughly 10% annually. In his view, these kinds of increases better reflect the inflation Americans experience in daily life.

Maharrey repeatedly returned to the idea that monetary inflation — specifically government and central bank money creation — ultimately drives sustained price increases across the economy.

Money supply growth and the return of quantitative easing

To support his argument, Maharrey pointed to rapid growth in the M2 money supply.

According to Federal Reserve data cited during the episode, M2 increased from $21.61 trillion in February 2025 to $22.67 trillion in February 2026, representing a 4.9% increase in the money supply over the course of a year. The money supply expanded by another $57 billion in March alone.

He argued that this nearly 5% increase in money supply represents the “real” inflation rate and suggested it better explains persistent price pressures throughout the economy.

Maharrey also claimed the Federal Reserve quietly resumed quantitative easing in December, even if officials avoid using the term publicly. By purchasing U.S. Treasuries with newly created money, he said, the Fed is once again expanding its balance sheet and injecting fresh liquidity into the economy.

According to Maharrey, these policies guarantee continued inflation regardless of whether oil prices eventually stabilize or geopolitical tensions ease.

Deutsche bank raises alarm over de-dollarization

The second half of the episode focused heavily on de-dollarization and a new report from Deutsche Bank that Maharrey described as especially significant because it came from a mainstream financial institution rather than an alternative economic outlet.

The report, authored by analysts Malikica Sakdeva and Michael Hsu, argued that the post-Cold War “end of history” era dominated by U.S. economic and geopolitical supremacy may be ending. The analysts wrote that the world is once again entering a period of superpower competition, with major implications for gold and the dollar.

Maharrey highlighted several striking statistics from the report. The dollar’s share of global central bank reserves has reportedly fallen from around 60% to roughly 40%, while gold’s share has doubled over the last four years to approximately 30% of reserves.

He noted that central banks — especially in emerging markets — have aggressively accumulated gold since the 2008 financial crisis and even more rapidly after the U.S. weaponized the dollar through sanctions following Russia’s invasion of Ukraine.

Since 2008, emerging market central banks have purchased approximately 225 million ounces of gold, according to the Deutsche Bank report.

The analysts argued that gold’s growing role is not merely the result of higher gold prices. Instead, central bank buying itself is helping drive those price increases. They estimated that for every additional 1 million ounces of gold purchased by central banks, the gold price rises roughly 1%.

Gold could reach $8,000 under some scenarios

One of the episode’s most eye-catching claims involved Deutsche Bank’s long-term gold projections.

Using several de-dollarization scenarios, Sakdeva and Hsu concluded that gold prices could potentially rise to $8,000 per ounce over the next five years if emerging market central banks increase gold holdings to 40% of their reserves, even if overall emerging market foreign exchange reserves decline to $5 trillion.

Maharrey stressed that this scenario does not require a collapse of the dollar or complete abandonment of the global reserve currency system. Even modest reductions in global dollar demand, he argued, could significantly impact the U.S. economy.

Because the United States relies heavily on global demand for dollars and dollar-denominated assets, Maharrey warned that reduced foreign appetite for dollars would make it far more difficult for Washington to finance large deficits without higher interest rates and stronger inflationary consequences.

He argued that the dollar’s reserve currency status has long allowed the Federal Reserve to create trillions of dollars without triggering an immediate currency crisis because foreign economies absorb much of that liquidity.

“If the world didn’t want those dollars,” Maharrey warned, inflationary pressures inside the United States would intensify dramatically.

Precious metals as “real money”

Throughout the episode, Maharrey repeatedly encouraged listeners to view gold and silver as protection against ongoing currency devaluation.

He argued that fiat currencies are designed to lose purchasing power over time, while gold and silver cannot be created by central banks. Even under official inflation figures, he noted, the dollar loses meaningful value every few years.

Maharrey suggested that current sideways trading in precious metals represents a buying opportunity, particularly in silver, which he believes still has substantial upside potential in the current bull market.

The episode concluded with Maharrey urging listeners to consider precious metals before inflationary and monetary pressures worsen further, warning that “you can’t get your fire insurance when your house is burning down.”