In moments of crisis, our deepest fears come to the surface. Terrifying thoughts often accompany an unexpected plunge into uncertainty.
This was surely the case for Gary Hoy as he plummeted from the 24th floor of his office building in Toronto.
On July 9, 1993, the 38-year-old attorney at Holden Day Wilson was showcasing his office environment to a group of students. Hoy, who held both a law degree and an engineering background, was well-versed in building safety and compliance. His education had instilled in him an unshakeable belief in the resilience of the floor-to-ceiling glass windows he frequently demonstrated.
To prove the strength of the glass, he would often hurl his body against it, a stunt that always garnered gasps and cheers from onlookers.
However, during this particular demonstration, the unthinkable happened. As Hoy bounded toward the glass, it did not shatter. Instead, it dislodged from its frame and he fell to the ground below, tragically losing his life upon impact.
A structural engineer later remarked to the Toronto Star, “I don’t know of any building code in the world that would allow a 160-pound man to run up against a glass window and withstand it.”
Hoy was labeled a victim of ‘accidental auto-defenestration’—a tragic term for causing oneself to fall out of a window. He is fondly remembered as one of the firm’s brightest talents.
This incident underscores the dangers of placing blind faith in safety measures. Hoy believed he was shielded from the consequences of reckless behavior; unfortunately, he found out otherwise.
The Dollar’s Blind Faith
Similarly, America’s leaders seem to harbor an unyielding confidence in the durability of the U.S. dollar. Over the decades, despite rampant budget deficits and a staggering national debt exceeding $36.7 trillion, the dollar has remained ostensibly strong.
The dollar has endured through $9 trillion in quantitative easing, multiple bank bailouts, senseless conflicts, and pandemic-induced financial giveaways. This history of resilience has fostered a belief among policymakers that the dollar can weather any storm, continuing to serve as the world’s primary reserve currency.
However, this assumption is at risk of being shattered. The turbulent consequences that followed President Trump’s tariff announcements may foreshadow a time when the dollar could steeply decline.
For instance, on April 3, the NASDAQ dropped by 5.97 percent, while the S&P 500 and Dow Jones suffered significant losses—4.84 percent and 3.98 percent, respectively. The very next day, China retaliated with a 34 percent tariff, prompting further declines across major indices. By April 5, the NASDAQ had lost over 11 percent, the S&P 500 dropped 10 percent, and the Dow fell more than 9.48 percent, culminating in a staggering loss exceeding $6.6 trillion—marking the largest two-day loss in history.
This period also saw the Dow suffer its first-ever consecutive days of losses exceeding 1,500 points, alongside record declines for the S&P 500.
Yet, it was in the Treasury market where dynamics shifted sharply…
Unexpected Reversals
As stocks tumbled, bond demand initially surged, causing a decline in bond yields—historically moving inversely to price. The yield on the 10-Year Treasury Note fell to 3.86 percent on April 4, its lowest since October 2024.
This dip was initially welcomed, as lower yields equate to reduced borrowing costs for consumers and lower expenses for government debt.
The Trump Administration viewed this as part of a strategic plan to minimize borrowing costs, suggesting the yield dip was one of the benefits of its tariff policies. Yet, an unforeseen shift occurred, whereby the bond market began to decline as well, sending yields upward.
By the morning of April 9, the yield on the 10-Year Treasury Note surged to 4.5 percent, while the 30-Year Treasury Bond experienced a dramatic 54 basis points increase—its largest three-day jump since 1982. This spike raised questions: Was it driven by inflationary expectations stemming from tariffs? Or could it be that foreign investors were pulling back amid rising skepticism over U.S. economic stability?
Faced with mounting bond market turbulence, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick urged Trump to pause the tariffs, excluding China. Subsequently, the stock market rebounded, and bond yields eased, though this reprieve may be fleeting given the underlying damage.
The Impending Dollar Crisis
As of now, the dollar index has declined approximately 7.68 percent since the beginning of the year. In currency terms, this drop is significant. It means that, even without Trump’s tariffs, imports will become pricier while American exports will gain competitiveness, aligning with Trump’s goal of strengthening domestic manufacturing through a weakened dollar.
Gold, a critical indicator of the dollar’s weakening value, has surged over 21 percent year-to-date, driven by unprecedented demand from central banks. According to the World Gold Council, central banks collectively increased their reserves by 1,045 tons in 2024, marking the third consecutive year of reserves exceeding 1,000 tons.
Both central banks and individual investors have ramped up gold purchases. In 2025, the relationship between tariff announcements and gold prices has become increasingly evident, correlating with an average price surge of 2.3% following major trade policy announcements, compared to just 0.7% during non-announcement periods.
“Institutional investors have responded accordingly, increasing their precious metal allocations with gold ETF holdings growing by 14% year-on-year in 2025. This shift highlights a waning confidence in U.S. dollar assets amid erratic policy changes and fears of destabilizing retaliatory measures from trading partners.”
This trend underscores a crucial message: both central banks and investors are losing faith in the dollar’s reliability as a reserve asset. Diversifying assets away from the dollar is becoming a logical strategy.
Recently, the Commerce Department revealed that U.S. GDP contracted by 0.3 percent in Q1 2025. If the economy continues to shrink, the government may resort to further monetary stimulation through rapid printing.
This trajectory could exacerbate the existing lack of confidence and precipitate the ultimate collapse of the dollar’s value. Just as Gary Hoy experienced a tragic fall from grace, dollar holders around the world may confront an ominous fate, leaving them to lament the dollar’s inevitable descent.
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Best regards,
MN Gordon
for Economic Prism
Return from Triggering the Dollar’s Fateful Demise to Economic Prism
