Foreign governments reduced their holdings of U.S. Treasurys in March, a trend driven by the Middle East war and its impact on global energy prices. Central banks, particularly in Asia, liquidated dollar reserves to defend their local currencies against a significant energy shock that caused exchange rates to fall. This sell-off, with major holders like China and Japan cutting their positions, reflects both currency intervention needs and tactical portfolio adjustments amid market volatility and rising inflation fears.
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It appears the crucial Strait of Hormuz has become a formidable tollbooth, and the fees are not being paid in dollars. Instead, the whispers suggest that Iran is monetizing this vital waterway, and for ships, particularly those of American interest, navigating this passage might soon require a detour through Chinese yuan. This raises a rather intriguing, and perhaps unsettling, prospect: would the United States itself be compelled to exchange its dollars for yuan to ensure passage, effectively paying tribute to a geopolitical rival?
This situation seems to underscore a broader principle in foreign policy: blunders rarely go unpunished, and when a significant misstep occurs, other nations are quick to seize the opportunity for their own gain.… Continue reading
The Russian ruble’s recent surge against the U.S. dollar—a remarkable 40% increase since the start of 2025—is a striking development that demands careful consideration. While some might attribute this solely to easing tensions between Russia and the United States, a deeper analysis suggests a more complex interplay of factors at play. The narrative of a simple geopolitical détente doesn’t fully account for the magnitude of this shift.
The substantial increase in Russia’s M2 money supply, approximately 100% since February 2022, significantly impacts this ruble’s strength. This massive injection of rubles into the economy, while potentially fueling inflation domestically, is seemingly being offset by deliberate manipulation of exchange rates.… Continue reading
John Q. Hosedrinker 
Matt Underwood