Griffin: Gold Safer Than Dollar as Investors De-Risk

According to Ken Griffin, the financial landscape is witnessing “substantial asset inflation away from the dollar.” This movement, which he terms a process of “de-dollarization,” is driven by investors looking for ways to shield their wealth from the specific fiscal and political uncertainties emanating from the United States. Griffin explicitly frames this not as a search for higher returns, but as a defensive maneuver to mitigate exposure to “US sovereign risk.” This represents a significant departure from the long-held status of the US dollar as the world’s premier safe-haven asset.

The immediate catalysts for this shift, as highlighted in the Bloomberg interview, include the lingering federal government shutdown and the prospect of potential interest rate cuts from the Federal Reserve. These developments have created a potent mix of political instability and anticipatory monetary policy, fueling a rush into assets perceived as being outside the traditional dollar system. This sentiment propelled gold to a record high on the day of Griffin’s remarks, underscoring the real-time market impact of these fears.

This strategic pivot away from the dollar has crystallized into a recognizable market phenomenon known as the “debasement trade.” In 2024, investors have been placing significant bets not just on gold, but also on silver and Bitcoin. These assets, which exist outside the direct control of any single central bank, are being embraced as hedges against what investors perceive as the potential debasement of fiat currencies, particularly the US dollar.

Griffin contextualized this trend by critiquing the current US economic policy. He observed that the United States is deploying a level of fiscal and monetary stimulus that is “more akin to what normally happens during a recession.” Instead of using such powerful tools to combat an economic downturn, they are being applied to an economy that Griffin believes is already running hot, a condition he vividly described as a “sugar high.” This unconventional application of recession-fighting tools during a period of growth is, in his view, stoking market distortions and eroding confidence in the dollar’s long-term value.

Griffin’s characterization of the US economy being on a “sugar high” is a central pillar of his concern. This metaphor suggests a temporary state of elevated performance driven by stimulative policies, rather than sustainable, organic growth. The concern is that once the effects of this stimulus wear off, the underlying vulnerabilities—including the very sovereign risks that are currently driving investors toward gold—will be exposed.

The collective movement into gold, silver, and Bitcoin is therefore more than a simple tactical trade; it is a vote of no confidence in the current trajectory of US fiscal and monetary management. For a figure of Ken Griffin’s stature, the founder of one of the world’s most successful financial institutions, to publicly label this shift “really concerning” sends a powerful signal to the market. It highlights a growing unease among sophisticated investors that the foundational trust in the US dollar, a cornerstone of the global financial system for decades, is being tested in unprecedented ways.