US Dollar Slides: Experts Warn of Decline, Say America Now ‘Relatives of Bangladesh’

New Delhi: The US dollar, long the world’s dominant currency, is showing signs of weakening, sparking concern among economists and investors. According to an NPR report, the dollar fell more than 9% in 2025—the worst annual performance since 2017—reflecting a turbulent year for the US economy and signaling continued uncertainty in 2026. Some American experts have gone so far as to claim that the United States is becoming “a relative of Bangladesh” in terms of currency strength.

Dollar Faces Further Pressure
The report indicates that the dollar could slide further as the Federal Reserve may continue lowering interest rates—a move that generally reduces a currency’s value. While some aspects of the US economy could provide partial support, the market anticipates ongoing volatility. Despite the decline, the dollar still accounts for roughly 88% of global currency transactions.

Historical Roots of Dollar Instability
A Forbes article by John Tamny, Senior Fellow at Parkview Institute and MarketIns, traces the roots of the dollar’s instability to post-1971 economic policies. Tamny argues that economists, including Milton Friedman and others, influenced President Nixon to abandon fixed dollar valuations, prioritizing market flexibility over currency stability. This, he suggests, has contributed to the slowdown in US economic progress since the 1970s.

Economic Progress and the Role of Investment
Experts highlight that true economic growth stems from investment and innovation, not merely consumption. Historically, demand for goods like cars, radios, televisions, computers, and smartphones emerged only after they became widespread. Progress, therefore, is driven by entrepreneurs and risk-taking capital that bring transformative ideas to life—not by selling pre-existing products.

The Fallout of Detaching Dollar from Gold
Tamny notes that Nixon’s decision to sever the dollar’s link to gold removed a critical anchor of stability. This fueled excessive volatility in currency markets, discouraging investment and creating ripple effects on the US economy. Today, daily global currency trading exceeds $7–10 trillion, emphasizing the importance of stable money for productive investment.

US Living Standards Affected
The combined effect of dollar instability has reduced investment-driven progress, leading to slower economic growth and lower potential returns. As a result, Tamny warns, the US finds itself in a weakened relative position—metaphorically becoming “relatives of Bangladesh”—despite overall improvements in living standards.

Key Takeaway
Experts argue that long-term economic progress relies on investment. Since 1971, dollar instability has hindered growth, and unless corrective measures are taken, uncertainty in the currency could continue to impact both domestic and global financial systems.