| A GREY SWAN PUBLICATION | Tuesday April 22, 2025 | Swan Dive — April 22, 2025 The Confidence Landslide Addison Wiggin What we’re watching right now isn’t a flash crash. It’s not even a panic. It’s something far more unnerving: a slow-motion demolition of the economic framework that’s underpinned markets for nearly 80 years.
The post-WWII Pax Americana — built on dollar dominance, central bank independence, and the illusion of American exceptionalism — is being methodically dismantled.
And how do we know the foundation’s giving way? On Monday, we witnessed a rare trifecta: stocks, bonds, and the dollar all falling at the same time.
Usually, when equities sell off, bonds rally and the dollar strengthens. This time, nothing’s catching a bid.
Except, amid that wreckage, gold rises — topping $3,500 an ounce overnight.
The Midas metal isn’t just a hedge against inflation. It’s a vote of no confidence. In what? You name it. In fiat currency. In the Fed. In a political system that no longer even pretends to be predictable.
You’ve got to have a strong stomach to watch this reel play out in real time — and a sharper mind to separate the president’s narrative from what markets are actually doing.
Regardless of the policy goals behind Trump’s tariff war, the markets will set prices — both for equities and, more urgently, for how much it’ll cost Treasury Secretary Scott Bessent to roll over $2.8 trillion in short-term debt this year. That’s not politics. That’s math. 📉 This Is What a Landslide Feels Like Monday’s low-volume session, with Europe closed, gave us a distorted view. But it still showed the rot: the S&P 500 briefly gave up all its relative gains over global markets since January 2024. Sixteen months of bubble gains – gone in a day.
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🌍 Foreign Investors: From Piggy Bank to Fire Sale The real loss isn’t even domestic — it’s foreign. Global investors who piled into the “U.S. exceptionalism” trade over the last two years are now seeing it unravel. The S&P is down 16% in dollars since February, but over 25% in Swedish krona. The dollar is sliding, and the exit is getting crowded.  If you were a foreign fund manager and treated U.S. stocks like a piggy bank over the past few years, it just got dropped on the floor. And it explains why European stocks have fared better as European capital has left the U.S. and gone home. 📦 Trump’s Tariffs: Reshoring or Reshuffling? There is a strategic logic behind Trump’s trade moves — reclaim domestic manufacturing and reduce dependence on fragile global supply chains.
Several weeks ago, foreign investors were happy with the status quo.
Happy to let Wall Street hoover up the world’s capital. And equally happy to have the United States go into debt to the world to make it happen.
An investor in Stockholm couldn't care less if the parts for his ankarsrum assistent came from Shenzhen or Toledo, Ohio. He just wanted his pensionsmyndigheten to be managed safely by the state fund managers, who until February 19, looked like financial wizards.
And as foreign capital reconsiders its exposure to the U.S., those moves look less like a reset and more like pulling the support beams out from under a still-occupied building. 💬 Powell: “A difficult place for a central bank to be.” The Fed can’t lower rates without stoking inflation. It can’t raise them without triggering layoffs. Powell, stuck in the middle, said last week that tariffs are forcing a “challenging scenario.”
It doesn’t help that Trump calls him a “major loser,” who seemingly refuses to budge as other central banks continue to pursue rate cuts —not that rate cuts would be the elixir the market needs right now anyway.
The optics aren’t great. Neither is the political pressure mounting around the one institution that’s supposed to remain above it all. And be a “lender of last resort.” (Did we mention the Fed’s balance sheet went negative for the first time in September 2022?) 📉 Treasurys: The Flight to Nowhere In past crises, Treasurys were the safe haven. Now, even bonds are falling, with the 2-year yield jumping back above 5%. When investors are afraid to even hide in U.S. debt, you know the problem isn’t just rates — it’s trust. And that lack of trust will make it more difficult to refinance said debt as it rolls over. 🧠 This Started Months Ago As early as August 6, 2024, we warned about the precarious concentration of foreign capital in U.S. tech stocks. The Mag 7 were massively over-owned by foreign institutions chasing capital gains – returns from the bubble brewing in AI stocks. But that safety depended on one assumption: that the U.S. would remain stable and predictably puff the markets with debt.
Tariffs, a wobbling Fed, and a political knife fight later, that assumption is gone.
Controlled demolitions are supposed to be neat, contained, and managed. But it is a good idea to steer clear of the blast zone. If the engineers miscalculate — or forget that half the world is still living in the building when you press the plunger — what you get isn’t control. You get panicked hordes. And collapse.
– Addison P.S.: This Thursday at 11 a.m. ET, we’re holding Grey Swan Live — a deep dive into what happens when the safety trade disappears. If gold is the only thing left standing, what comes next? We’ll check in with Shad Marquitz on energy independence, natural resources, rare earths – the hard stuff civilization is made of. The invite lands for our paid members tomorrow. Be ready. And if you want to know more about what’s going on in the commodity markets, you can check out some of our latest research here.
As always, your cheerful reader feedback is welcome: feedback@greyswanfraternity.com (We read all emails. Thanks in advance for your contribution.)
How did we get here? Find out in these riveting reads: Demise of the Dollar, Financial Reckoning Day, and Empire of Debt — all three books are now available in their third post-pandemic editions. You might enjoy one or all three. 
(Or… simply pre-order Empire of Debt: We Came, We Saw, We Borrowed, now available at Amazon and Barnes & Noble or if you prefer one of these sites: Bookshop.org, Books-A-Million or Target.)
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