No one seems to be worried about the falling dollar, veteran stockbroker Peter Schiff writes on Twitter, as the US currency continues to slide versus major rivals amid gold and silver record growth.
According to Schiff the ignorance is “likely to remain the case until the fall becomes a crash, which I don’t think will begin until the Dollar Index breaks 80. At its current rate of decline that level could be breached before year end, perhaps by election day.”
The decline of the US dollar accelerated in recent weeks on a rise in coronavirus cases in the United States and indications of a pickup in global economic activity. The ICE US Dollar Index, which tracks the greenback against a basket of six major rivals, fell 0.4 percent on Friday to 92.635 and traded at its lowest since July 2018. Meanwhile, gold continued its rally to hit fresh all-time highs.
“Coronavirus just accelerated the process of the dollar’s fall and there’s nothing that the Federal Reserve could do right now to preserve the dollar from falling,” Schiff said on his podcast.
He explained that the negative interest rates are actually far more negative because the US government is using the CPI (Consumer Price Index) “which barely scratches the surface on how high inflation is.”
According to Schiff, gold will supplant the dollar because the euro and other currencies are not ready to take its place. “No other currency will take the dollar’s place, real money will take its place, particularly gold, because gold was there before the dollar,” he said, noting that the greenback “did a lousy job, and now gold is taking its spot back.”
Schiff said: “The entire house of cards economy that has been erected over the years, and the Federal Reserve has been the architect of this house of cards economy, is rested on the foundation of the dollar’s reserve currency status. If the dollar loses that status then the foundation crumbles and the whole house of cards topples.”