Nowadays, governments are increasingly shaping markets, introducing an era of fiscal dominance. Gone are the days of aggressive central bank activism from the early 2000s, when institutions like the Fed and the ECB worked on stabilising the economy through quantitative easing, forward guidance, and rapid rate cuts. These actions were largely technocratic and independent of elected governments.

Monetary debasement has been a recurring process throughout economic history, with governments and central banks seeking ways to manage mounting debts and economic crises. In its simplest form, debasement refers to the reduction in the value of a currency, historically through lowering the precious metal content (such as gold and silver) in coins, and in modern times through excessive creation of money. While these measures have sometimes provided short-term relief, they carry hidden costs that can have profound long-term implications.

‘Liberation Day’, announced on the April 2, was a game-changer and yet another warning shot fired by the Trump administration. The ensuing 90-day pause brought additional volatility to the markets, resulting in sharp fluctuations that felt like financial whiplash. The global tectonic plates are shifting, and everyone must adjust.