Do you hold dollars? Peter Schiff thinks it's a bad idea!

In the face of a constantly evolving global economy, investors are on high alert. Recently, Peter Schiff, a renowned economist and fervent advocate of gold, issued an unequivocal warning against buying US dollars. According to him, the combination of rising Treasury bond yields and runaway inflation could precipitate a dramatic depreciation of the US currency. A perspective that warrants particular attention from all economic actors.

Recent statements by Peter Schiff

Peter Schiff, a renowned economist and fervent advocate of gold, recently warned investors against buying US dollars and selling gold. In a series of posts on the social network X, Schiff explained that: « Investors should not buy dollars or sell gold because nominal yields on Treasury bonds are rising. Yields are rising only because the federal government has lost control of the national debt and the Fed has lost control of inflation. »

Schiff also highlighted the significant widening of US trade deficits. In April, the trade deficit in goods reached $99.4 billion, an increase of 7.7% from the previous month, and the largest monthly gap since March 2022. « This indicates a non-productive economy that will lead to a drop in the dollar and a rise in prices », he noted.

Furthermore, Schiff warned that so far, the strength of the dollar against other fiat currencies has shielded American consumers from the full impact of inflation. However, he warned that « once the dollar falls, this protection will disappear and inflation will hit consumer purchasing power much harder ». Schiff anticipates that a depreciation of the dollar will be accompanied by a spectacular surge in gold prices, predicting that « most investors are not at all prepared for this eventuality ».

The depreciation of the dollar and its impacts on the gold market

Peter Schiff’s warnings raise serious concerns about the future of the US dollar and the global economy. A significant depreciation of the dollar could provoke a surge in gold prices, as suggested by Schiff. This situation could lead to a loss of purchasing power for American consumers and exacerbate already present economic tensions. Investors, unprepared for such an eventuality, could be caught off guard, which could intensify financial market volatility.

Moreover, UBS recently raised its gold price forecasts, anticipating continued increases due to growing demand from central banks and geopolitical uncertainties. The bank now expects the price of gold to reach $2,700 an ounce by mid-2025. This upward revision reflects the increasing importance of gold as a safe haven in the face of economic turmoil.

In conclusion, investors must remain vigilant and informed in the face of these developments. The evolution of Treasury bond yields, the national debt situation, and the growing interest in cryptocurrencies are all factors that could redefine the global economic landscape in the years to come.