Peter Schiff is predicting the greenback will be ‘down for the count’ as the global reserve currency — here’s where he sees a golden opportunity
Story by Moneywise, 5/4/24
Veteran Economist Peter Schiff has warned Americans to get ready for “a major dollar decline.”
“I think gold is telling us that the dollar is going down again — and this time it’s going down for the count,” the 61-year-old said recently on Patrick Bet-David’s PBD Podcast.
“I think [the dollar is] going to be knocked off its pedestal,” Schiff added. “I think it’s going to lose its status as the reserve currency.”
Gold prices soared to record highs in early April, fueled by central banks bolstering their bullion reserves amid geopolitical tensions.
So what does this mean for investors and the future of the greenback?
De-dollarization
Schiff is predicting a phenomenon known as “de-dollarization” — when countries shift away from the greenback as a reserve currency, medium of exchange or unit of account.
It’s true that the dollar has experienced a slow decline in recent years. IMF data shows the greenback’s share of global allocated foreign exchange reserves has fallen by around 7% since early 2016.
Rather than losing its global reserve throne to another currency, Schiff is more interested in data that shows central banks are ditching the dollar in favor of a shinier and more stable alternative: gold.
“Gold has already broken out,” he told Bet-David, alluding to the fact that central banks bought gold at “breakneck pace” in 2023, per the World Gold Council (WGC), with annual net purchases of 1,037 tonnes, just 45 tonnes short of the 2022 record.
Banks buying gold at ‘historic levels’
Central banks still rely heavily on the U.S. dollar, with the currency accounting for 58.41% of reserves in the fourth quarter of 2023.
However, the price of gold hit an all-time high in April and there’s still room for it to soar higher, according to WGC Global Head of Central Banks Shaokai Fan.
He told CNBC in March: “Central banks, who have bought historic levels of gold over the past two years, continue to be strong buyers in 2024 as well.”
If you’re convinced by Schiff’s argument that the end of the dollar is nigh, there are simple ways to copy the central banks and shore up your investment portfolio with gold.
For example, you could open a Gold IRA — a type of individual retirement account that allows you to invest in gold and other precious metals in physical forms, like coins, instead of stocks, mutual funds and other traditional investments.
If the dollar really is down for the count per Schiff’s prediction, gold appears set to remain standing, so a gold IRA might just be the tool you need to protect your portfolio and retirement savings.