The Hidden Tax That’s Wrecking Your Wallet
How tariffs, debt, and a weakening dollar are setting off a slow-moving crisis
Let’s start with a fact.
In June, Hasbro laid off 150 workers. The reason? Rising costs.
More specifically, tariffs.
Hasbro makes half its toys in China. When tariffs hit, prices rose fast. What was supposed to protect American jobs ended up destroying them instead.
This wasn’t just a corporate problem. It was a warning shot.
And if you think it ends with Hasbro, think again.
The reality is that we are watching a full-blown stagflation scenario take shape. That means slower growth, higher prices, and a weaker dollar all at the same time. Most people aren’t ready for what comes next.
Let’s unpack what’s happening and why it matters.
Stagflation Is No Longer a Theory. It’s Here.
The economy is slowing down. Fast.
GDP growth dropped to 1.2 percent in the first half of 2025, compared to 2.8 percent in 2024. Consumer spending has barely moved.
Businesses rushed to import goods before new tariffs kicked in, which caused a spike in Q1 and a collapse in Q2. It looked good on the surface, but under the hood the economy is losing momentum.
Meanwhile, inflation is heating up again.
The consumer price index went from 2.3 percent in April to 2.7 percent in June. Food is up. Furniture is up. Everyday items are quietly becoming more expensive. And real wages are stuck or falling.
People are paying more and getting less.
All of this points to stagflation: weak growth, rising prices, and no easy fix.
The Federal Reserve has one job. Keep prices stable and support employment. Right now, those goals are pulling in opposite directions.
Cut rates to help growth? Inflation will rise.
Hold rates steady to fight inflation? Growth slows even more.
This is a classic no-win setup.
That’s why the Fed left rates unchanged at 4.3 percent in July. They’re under pressure from the White House to cut, but they know tariffs are pushing prices up and inflation expectations are rising.
They’re stuck. And it’s only going to get worse if job losses begin to rise.
Washington Keeps Spending. The Dollar Pays the Price.
At the same time the Fed is trying to slow things down, Congress is slamming the gas pedal.
The new “One Big Beautiful Bill Act” will add over $3.3 trillion to the national deficit over the next decade. That’s on top of $2 trillion deficits we were already running.
The U.S. debt is headed toward 125 percent of GDP. Interest payments are set to double.
Markets have noticed. A major ratings agency downgraded the U.S. credit rating in July.
This isn’t just about debt. It’s about confidence. And confidence is what supports the dollar.
If the world stops trusting the U.S. to manage its economy, the dollar will keep falling. And that is exactly what’s starting to happen.
The Dollar Is Slipping. Gold Is Surging.
The dollar index has started to roll over.
Currency analysts are calling for a long-term bearish phase. Some expect a 15 percent decline over the next few years.
What happens when the dollar weakens? Two things.
First, imports become more expensive. That fuels more inflation.
Second, hard assets priced in dollars rise. That includes gold.
Right now, gold is up 65 percent since the start of 2024. It recently touched $3,400 per ounce. Some analysts think it could hit $4,000 or more. Central banks are buying. Investors are rotating in. This is no accident.
Gold outperforms when confidence in paper money fades.
That is exactly where we are.
Tariffs Are an Inflation Tax. And They Hurt the Most Vulnerable.
The average American household is losing about $2,100 per year to tariffs. That’s money pulled out of your budget through higher prices on food, furniture, clothing, and electronics.
This tax is invisible, but it hits everyone.
Low-income families take the biggest hit, because they spend more of their budget on goods that are now more expensive. One study shows that households at the bottom saw a 4 percent drop in disposable income due to tariffs.
The rich feel it too, but they can absorb it. The middle and lower class cannot.
And while families cut back, businesses are feeling it as well.
Car prices have jumped 8 percent. Automakers are warning of layoffs. Companies that rely on imported goods are seeing profit margins shrink.
This is not theory. It’s already playing out.
You Can’t Control the Policy, But You Can Control Your Strategy
You can’t stop the tariffs. You can’t vote down trillion-dollar spending bills. But you can reposition yourself before the damage spreads further.
Here’s how to think about it:
Own real assets. When the dollar falls, hard assets tend to rise. That includes gold, commodities, and real estate.
Cut exposure to variable debt. If inflation stays sticky, interest rates will stay higher. Lock in fixed rates or pay down high-interest loans.
Diversify globally. Some emerging markets benefit from a weaker dollar and stronger commodity cycles.
Keep a portion of your portfolio outside the traditional system. That might mean gold, crypto, or other inflation-sensitive investments. You don’t need to go all-in. Even small positions can make a big difference.
This Is How Wealth Gets Rewritten in a Crisis
Stagflation isn’t coming. It’s already reshaping the economy in real time.
The dollar is slipping. Prices are rising. Growth is slowing. And policy is making it worse, not better.
The average investor will wait too long. They’ll hope it blows over. They’ll stay overweight in assets that lose value as purchasing power erodes.
But others will reposition early. They’ll move into real assets. They’ll sidestep the worst of the volatility. And they’ll be on the right side of history when the reset is done.
This is how wealth shifts hands.
It doesn’t happen during calm markets. It happens during dislocations like this one. You don’t need to be extreme. You just need to be early.
Stay Sharp,
Gideon Ashwood