--- title: "BOCIC: Washington sacrifices dollar hegemony to consolidate American hegemony; the abnormal surge in gold prices reflects a turning point in the global circulation of the dollar" type: "News" locale: "en" url: "https://longbridge.com/en/news/273493554.md" description: "BOCIC pointed out that the \"reciprocal tariff\" policy introduced by the United States aims to suppress the global circulation of the dollar, reflecting the U.S. choice to sacrifice dollar hegemony to consolidate its own hegemony in the face of the \"fundamental Triffin dilemma.\" This policy is seen as a sign of the transition from prosperity to decline in the global circulation of the dollar, leading to a weakening of the dollar and U.S. Treasury bonds, while gold prices strengthen, indicating a turning point in the global circulation of the dollar" datetime: "2026-01-23T09:15:37.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/273493554.md) - [en](https://longbridge.com/en/news/273493554.md) - [zh-HK](https://longbridge.com/zh-HK/news/273493554.md) --- # BOCIC: Washington sacrifices dollar hegemony to consolidate American hegemony; the abnormal surge in gold prices reflects a turning point in the global circulation of the dollar BOCIC believes that the "reciprocal tariffs" introduced by the United States can be seen as a policy measure to suppress the global circulation of the dollar, reflecting the U.S. government's choice to consolidate American hegemony at the cost of sacrificing dollar hegemony when facing the "fundamental Triffin dilemma." In this sense, the "reciprocal tariffs" are a symbolic event marking the transition of the dollar's global circulation from prosperity to decline. The weakening of the dollar and U.S. Treasury bonds, along with the strengthening of gold prices after the policy was introduced, are manifestations of the turning point in the dollar's global circulation. Since the globalization process in the 1980s, an "global imbalance" has formed in the international economy. The United States is the main trade deficit country, with most of the global total trade deficit coming from the U.S. Accompanying the global flow of goods in this global imbalance is the global circulation of the dollar—dollars flow out of the U.S. through American purchases of foreign goods and flow back into the U.S. through foreign investments in American financial markets. It was the decoupling of the dollar from gold in 1971 that ushered the world economy into the "Jamaica system" era, freeing it from the automatic correction of trade imbalances by the "Hume mechanism," making global imbalance possible. Therefore, it can be said that the global circulation of the dollar has spawned global imbalance. Within the flourishing picture of the dollar's global circulation lie the seeds of its decline. Currently, the demand for dollars from surplus countries remains strong, but the seeds of decline are sprouting in the U.S. The dollar has caused the U.S. to suffer from "Dutch disease," leading to a decline in American manufacturing and industrial hollowing, threatening America's long-term hegemony. The U.S. is facing the "fundamental Triffin dilemma," which is the contradiction between American hegemony and dollar hegemony—American hegemony has created dollar hegemony, but dollar hegemony, in turn, can lead to the decline of American hegemony and ultimately the loss of dollar hegemony. The "reciprocal tariffs" introduced by the U.S. in April 2025 can be seen as a policy measure to suppress the global circulation of the dollar, reflecting the U.S. government's choice to consolidate American hegemony at the cost of sacrificing dollar hegemony when facing the "fundamental Triffin dilemma." In this sense, the "reciprocal tariffs" are a symbolic event marking the transition of the dollar's global circulation from prosperity to decline. The weakening of the dollar and U.S. Treasury bonds, along with the strengthening of gold prices after the policy was introduced, are manifestations of the turning point in the dollar's global circulation. From the rise and fall of the dollar's global circulation, China can draw three insights. First, in the long term, the internationalization of the renminbi should not aim to replace the dollar or establish renminbi hegemony. Second, in the medium term, China should actively expand domestic demand and promote consumption transformation to reduce reliance on "external circulation" through a smoother "internal circulation." Third, in the short term, China is likely nearing the "ceiling" of external demand. BOCIC mentions that the abnormally high gold prices in 2025 are also related to the turning point of the dollar's global circulation. Typically, gold is a special commodity with safe-haven attributes, and gold prices exhibit significant counter-cyclicality: when the global economy is booming, gold prices tend to underperform compared to industrial raw material prices; when the global economy weakens, gold prices tend to outperform industrial raw material prices. Over the past 40 years, this counter-cyclical nature of gold prices has been quite pronounced. However, the situation began to change in June 2024. In the year since then, the international economic prosperity, measured by the leading index of the G7 countries (OECD), has clearly risen, reflecting an overall improvement in international economic prosperity According to the experience of the past 40 years, gold prices should lag behind industrial raw material prices at this time. However, the situation is exactly the opposite; during this period, the excessive increase in gold prices relative to industrial raw material prices has not decreased but rather increased, even reaching a new high in forty years, completely breaking the historical experience of the past four decades. The abnormal surge in gold prices reflects a turning point in the global circulation of the US dollar. Although among the various potential alternatives for international payment instruments (gold is included), there is still nothing that can replace the status of the US dollar, the decline in confidence in the dollar will still affect the prices of various assets. For international investors, although a substitute for the dollar has not yet been found, it is reasonable to reduce some dollar assets and increase some gold in their asset allocation. 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