The U.S. Dollar: Short vs. Long Term || Peter Zeihan

TL;DR

The dollar will rise for decades due to military, demographic, and resource advantages, but Trump's immigration, tariff, and rule-of-law policies are pushing it down now.

Key Points

• 1.Long-term, the dollar has nowhere to go but up. Four structural advantages — unmatched naval dominance, millennial-driven demographics, energy/food export surplus, and a manufacturing expansion need — all point to decades of dollar strength.
• 2.Immigration crackdowns caused the first-ever U.S. population drop in 2025. The U.S. went from the fastest-growing first-world population to near the bottom in 12 months, squeezing labor markets in construction and healthcare.
• 3.Tariffs are killing industrial investment, not boosting it. Complex manufacturing with thousands of steps (cars, planes, computers) makes tariffs counterproductive — companies are offshoring steps to avoid paying tariffs on every intermediate good, and industrial construction spending is falling.
• 4.Over 5,000 tariff changes since April 2nd have paralyzed business decision-making. Combined with a regulatory structure divorced from economic reality and ICE undermining rule of law, business confidence, activity, and expansion are all declining.
• 5.The Iran war updated the picture but confirmed the paradox. The dollar rose vs. nearly every currency, but only ~2% over two weeks of war and Persian Gulf closure — far below the double-digit gains expected, showing markets are reluctant to trust U.S. assets under current policy.