Markets may cheer the prospect of the Fed easing post-Jackson Hole, but when combined with tariffs, this becomes a dangerous prospect. Inflation risks are mounting, and the structural consequences for the USD loom ever larger.
On 29 May 2025, I formalised my decade-long concerns about a deep, disruptive, transformational overhaul of the US financial system, and a reset for the Federal Reserve, into a forecast in my post The Personal View: “When EURUSD Trades 1.50 – The Nectar of the Gods and Price of Reckoning.”
This note explores how unsustainable US fiscal habits, rising inflation risk, and global capital rotation are pushing us toward a volatile but inevitable devaluation of the dollar.
EUR/USD at 1.50 – The Price of Reckoning
In March 2016, The Personal View released “The USA – The Next 18 Years”, and I warned of an anticipated period of deep structural transformation in the foundational architecture of American finance. My decade-long 2016 forecast continues to gather relevance:
“For far too long, the USA, and others, have been locked into a pattern and habit of high-flying, risky investment and consumption, the very source of the 2008 meltdown…the USA has not dealt with its obsession with debt and risky investment…Ultimately, over 18 years, the results are very positive as structural reform is implemented.”
The Road to EUR/USD 1.50 and Monetary Reckoning
We now approach a scenario where EUR/USD at 1.50 is inevitable, as the consequence of sustained US fiscal excess, speculative momentum, and monetary distortion. It’s about reassessing the value and credibility of the US dollar itself. And yes, there is a volatile, disorderly glide path to 1.50. It doesn’t happen in the afternoon. See The Personal View: “Positioning for the Market Turmoil Ahead (2025-2028)”.
This forecast is part of a broader theme: the idea that when debt-driven consumption and high-risk investment are treated as the nectar of the gods, the price is losing one’s head before reform arrives.
As the Panic of 1907 led to the creation of the Federal Reserve in 1913, today’s challenges are forcing the system toward structural overhaul.
The Limits of Monetary Power
Yes, the US issues debt in its currency, and it can print to meet obligations. However, this monetary flexibility comes at a cost. The real price emerges through dollar devaluation, inflationary pressure, and the erosion of monetary credibility.
We are witnessing a fiery, necessary transformation, a phase where the financial status quo is washed away, creating space for reassessment, recalibration, and redefinition of the institutions at the core of the US system.
A New Financial Epoch Begins
The Federal Reserve, designed for a different era, increasingly outmoded, faces a world it wasn’t built to manage. Its role and structure are being reformed in time. The pillars of US post-war dominance, cheap capital, endless leverage, and default intervention, are being sanctioned by investors.
In 2016, The Personal View warned that indulgence in debt-driven speculation and consumption cannot persist without profound consequences. In 2025, this reform is no longer merely my forecast. It’s underway. The US financial landscape is being deeply overhauled. What emerges will reshape domestic markets, global capital, reserve structures, and strategic influence. See The Personal View “Megatrends & The Future of Capital.
This isn’t another cycle. It’s the dawn of a new financial epoch.
What are your thoughts on the looming USD reset and the Fed’s trajectory? Are we heading toward a currency reckoning or just another cycle? Join the conversation below.
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