US Dollar Devaluation Begins

By Mark Davidson on August 26, 2026 • ( 0 )

(26 August 2026) It is now 9 pm MST August 26, or, 3 AM GMT, August 27. We have been watching events centered on Iran and its regime, waiting for escalation of what looks to be the Second Signpost.

We have been watching since February 28. The Strait of Hormuz was mostly closed from March 2 to August 23 or so, being about 175 days. The Strait is sporadically open, and is under the control of the Iranian regime. The world oil inventory has been mostly drained at this point.

Death of the Petrodollar

Both in Daniel Revisited, chapter 10, and on this blog, I’ve written extensively over the years that the US Petrodollar will end. Just do a search on this site for “petrodollar”.

If Iran destroys much of the Arab oil infrastructure as it will likely do for the Second Signpost, the core of the petrodollar system would end. Only, it has already ended.

The US side of the petrodollar is that the US will defend the oil countries. However, the Iran War has unexpectedly shown that the US cannot defend them.

More worldwide trade has stopped using dollars, and now US dollars are being sold from nations’ foreign currency reserves. This will eventually end up as hyperinflation against the US dollar.

Dollar Devaluation

The devaluation has begun. I do not have the time needed to break everything down completely, but there are three reports from three different angles that show (1) the dollar inflation will accelerate, (2) gold valuation in dollars will increase greatly, and (3) the US bond being increasingly bought by the government itself.

Gold Re-Accepted as Money

This ZeroHedge article via Phoenix Capital Research, reports that Trump signed an executive order that effectively makes the government admit that gold really is money. Since 1934 the US government treated gold as a “barbarous relic” but now it admitted the truth – gold is money.

Does that mean gold will be confiscated again? I don’t believe so since few own gold today compared to those in 1934. However, one never knows.

Gold being treated as money means here is one factor pressuring the gold price in dollars to go up tremendously.

The big takeaway is in this last quote:

“Gold spent fifty years demoted to a relic. This administration has reclassified it as both the ground beneath the system and a weapon inside it. Own it accordingly.”

US Treasury Bond Games

This YouTube video titled, The Bond Market Bailout Just Started, is an excellent tutorial on not just US Bonds and how the work, but what is going on right now. The Fed is buying short-term debt in which it controls the interest rate, to fund buying long term debt in which the market controls that interest rate. The whole thing right now is a juggling act as the Fed tries to keep the house of cards from falling.

Right now, the Fed owns about half of all US debt worldwide, and when the Fed gets to the place where it owns all the debt, the Fed and the dollar become irrelevant and the US loses its power.

The Dollar Endgame

Felix Prin, former banker, has an excellent tutorial on what is going on right now with the dollar. (It’s also entertaining with his dry humor and sarcasm.) Treasury Secretary Bessent today in declaring “Economic D-Day” against Iran also mentioned we are now entering the endgame.

At time 06:01, he says Bessent said that any country that helps Iran will be removed from the US dollar system. The smart money, the central banks, are accelerating their buying of gold, and dumping US Treasuries. Because of Bessent’s threat, Countries are now accelerating their dumping of dollars, that is, selling US Treasuries.

I see this as our country shooting itself in the foot.

Felix also talks about the Bonds, and interest rates starting at abut time 10:19. The big takeaway, is the Fed is buying its own debt. Felix lays it out when a government starts buying its own debt; he says (at time 12:00):

“Nobody else wants to lend us money at a rate we can afford. So we’re going to lend money to ourselves. And that only works if you have money to lend.”

This of course directly results in greater inflation.

Pay special attention to the end of his video starting around time 22:12 – its a good summary of the whole situation.

Conclusion

I highly recommend you read and watch all three sources, they are very informative.

They all tell the same story from different perspectives. That story is, the US is done as an economic and financial powerhouse. It’s just a matter of time now.

As I’ve said in years past, get out of dollar-denominated assets. For instance extra money in savings accounts, US Treasuries, US stocks are all dollar-denominated. Instead get into precious metals, foreign stocks, or land.

The US will be poor. But this is good, for America will be broken of its cultural idol, and this will pave the way for tens of millions to come to Christ.

Be ready. Be prepared, so you can “Matthew 25:31-46” and be a blessing to others.

Keep watch.