Weekly Market Update by Retirement Lifestyle Advocates

Asia’s De-Dollarization Accelerates

         The Association of Southeast Asian Nations (ASEAN) released its Economic Community Strategy Plan recently.  The strategy plan outlined efforts to reduce shocks associated with exchange rate fluctuations by promoting trade settlements in local currencies.  (Source:  https://www.cnbc.com/2025/06/11/de-dollarization-in-asia-is-picking-up-speed.html)

         The de-dollarization movement is strongest in Asia, but the rest of the world has also been moving away from using the US Dollar to settle trade deals to the extent that it is practical.  The US Dollar made up 70% of foreign exchange reserves in 2000 and now comprises just 57.8% of those reserves. 

         One need only look at the US Dollar Index, which measures the purchasing power of the US Dollar against the purchasing power of the six major trading partners of the United States, to see how much the US Dollar has weakened of late.

         This is a weekly chart of the US Dollar Index.  I’ve drawn a line of what was once support across the chart.  Notice how the US Dollar Index has recently fallen below the support line.

         This decline in the purchasing power of the US Dollar has been reflected in gold prices.  The price of the yellow metal is up more than 26% year-to-date.

Gold Overtakes Euro as Second-Largest Reserve Asset

         As noted above, the US Dollar is being used less as a reserve asset globally.  It is being supplanted largely by gold, which is now the second-largest reserve asset globally.

         At the end of 2024, gold made up 19.6% of global reserves while the Euro accounted for 15.9% of reserve assets.  For comparison, at the end of 2018, gold made up just 11.6% of total global reserves.  (Source:  https://www.moneymetals.com/news/2025/06/13/gold-overtakes-euro-as-second-largest-global-reserve-asset-004124)

         The US Dollar accounted for 54.6% of global reserves in 2018 and presently represents only 46.5% of total reserves.

         As gold reserves have increased by about 69% since 2018, the US Dollar as a reserve asset has fallen by 14.8%.

         As you plan for your retirement, it may be important to remember that a trend in motion tends to stay in motion.  With operating deficits at the federal level as far as the eye can see, there is nothing to indicate that this trend will reverse anytime soon.

Real Estate Continues to Slow; Florida is Leading the Way

         Active listings of homes in Florida are now up 32% year-over-year.  There are now more than 181,000 home listings in the Sunshine State.  (Source:           https://wolfstreet.com/2025/06/10/inventory-of-homes-for-sale-in-the-biggest-florida-metros-piles-up-to-highest-in-years-as-demand-has-withered/)

         Since late 2022, available housing inventory has quadrupled.  Inventory levels in April and May of this year were by far the highest going all the way back to 2016.

         Inventory levels are far higher due to collapsing demand, not a surge in listings.  I have been suggesting that this would be the case over the past year or so due to the artificial interest rate environment that drove home prices higher.  See this chart of the Case-Shiller Housing Index.

      Notice from the chart that the Case-Shiller housing index rose from 218 at the beginning of 2020 to 338 presently.  That’s an increase in housing prices of 55% in about 5 years.  That can only be attributed to 30-year mortgage rates of less than 3%.  Now that mortgage interest rates are more historically normal, look for the housing market to continue to correct.

Delinquent Debt Threatens Banks

         The New York Federal Reserve Bank recently released its first quarter household debt survey, including the percentage of loans delinquent by loan type.

         Notice that about 8% of all student loan debt is delinquent by more than 90 days, more than 12% of credit card debt is delinquent, and about 5% of auto loan debt. 

These are getting to be serious numbers and will be a major challenge for many banks, in my view.

Do you know your bank’s safety ratings?  (Source:  https://www.kitco.com/opinion/2025-06-05/our-banks-continue-deteriorate-will-not-end-well)

RLA Radio

         This week’s RLA radio program features an interview that I did with Mr. Simon Popple, founder of The Gold Program.  The interview is posted and available now by clicking on the "Podcast" tab at the top of this page.

Quote of the Week

“My best friend ran away with my wife, and let me tell you, I miss him.”                                        -Henny Youngman