Veteran economist and stockbroker Peter Schiff notes that no one seems to be concerned about the falling dollar, amid the decline in the US currency against its main rivals as well as gold and silver prices showing record growth.
The expert indicates in his Twitter account that the dynamics of the dollar are very likely to remain ignored “until the fall turns into a collapse,” which he believes will begin when the Dollar Index (a weighted average of the dollar compared to a basket of foreign currencies) drops to 80.
“With the current rate of decline this level could be reached before the end of the year, perhaps on Election Day,” he said.
The decline in the dollar accelerated in recent weeks amid rising US coronavirus cases and indications of a surge in economic activity. The Dollar Index on the Intercontinental Exchange (ICE) has fallen 0.4% this Friday to 92,635, the lowest level since July 2018. Meanwhile, the price of gold continues an upward trend after marking its all-time high. this week.
“The coronavirus has simply accelerated the process of the dollar’s decline and there is nothing the Federal Reserve can do right now to curb this decline,” Schiff said on his podcast.
The expert stressed that negative interest rates are actually even more negative because the US government relies on the Consumer Price Index, which “hardly reflects how high inflation is.”
According to Schiff, gold will replace the dollar because neither the euro nor any other currency is prepared to relieve it.
“What will take its place is real money, particularly gold, because gold circulated before the dollar,” he says, adding that the dollar “did a bad job, and gold is taking its place.”
“The house of cards economy that has been built up over the years, and whose architect has been the Fed, is based on the status of the dollar as a reserve currency. If the dollar loses this status, the fundamentals crumble and the house of cards collapses,” he explained.
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