Leveraged ETFs Against the American Economy

In an ever-changing financial world, bold strategies emerge for those investors seeking not only to protect their capital but also to achieve exceptional returns. One of these strategies, very high-risk and not suitable for all profiles, is to position against the US economy using leveraged ETFs.

The Thesis: Why Bet Against the Dollar?

The strategy is based on several key macroeconomic premises:

Future Dollar Liquidity from the Fed: It is anticipated that the Federal Reserve (Fed) may be forced to inject large amounts of liquidity into the system to support markets and the economy, which would devalue the dollar.
Fiscal Dominance of Central Banks: Expansionary fiscal policies and the growing weight of public debt can force central banks to keep interest rates artificially low, weakening the currency.
Loss of Confidence: Political instability and polarization in the US government can undermine the confidence of international investors in the dollar as the ultimate safe-haven asset.

Portfolio Composition: An Ultra-Volatile Bet

This portfolio combines two leveraged assets that seek to exploit these trends. It is crucial to understand that leverage multiplies both gains and losses, and the time decay of these products makes them unsuitable for long-term holding without active management.

1. 3x Gold

Gold is the historic safe-haven asset against currency devaluation and inflation. A 3x leveraged position in gold seeks to triple the daily price movements of the precious metal. If the thesis of dollar devaluation holds true, gold should appreciate significantly, and this position would magnify that return.

2. 5x Short USD / Long EUR

To diversify and add another layer to the strategy, the portfolio includes a direct bet on the appreciation of the euro against the dollar, with 5x leverage. This position benefits directly from the weakness of the dollar and a possible relative strength of the euro, driven by economic or political factors in the Eurozone.

Conclusion and Risk Warning

This is a short to medium-term trading strategy, extremely aggressive and speculative. The high volatility and the use of strong leverage can lead to total losses of the invested capital in a short period. It is not a traditional investment strategy, but a tactical bet based on a very specific macroeconomic view. Proceed with extreme caution.