'Worse than 2008': Economist warns gold will replace US dollar
What's the story
Economist Peter Schiff has issued a stark warning about an impending economic crisis and the future of the US dollar. In an interview with Fox Business, Schiff said, "The dollar is going to collapse. The dollar is going to be replaced by gold." He predicted that the coming economic downturn would be worse than the 2008 financial crisis.
Economic transition
Shift away from dollar and US treasuries
Schiff noted a gradual shift away from the dollar and US treasuries, with countries and central banks building gold reserves to back their own currencies. He believes this shift indicates a deeper structural change in the global monetary system. Schiff also said that "the world is pulling the rug out from under the US," adding that this crisis would be different from 2008's.
Market fluctuations
Schiff's warnings amid market volatility
Schiff's comments come as equity markets face a tech rout and precious metals experience extreme price swings. He had earlier warned that the rally in gold and silver prices indicated deeper structural stress in the financial system. Despite these warnings, Schiff has been a vocal critic of claims that the US economy remains exceptionally strong.
Price adjustments
Gold and silver prices correct sharply
After a strong rally, silver and gold prices witnessed sharp corrections on February 5. The correction was attributed to profit booking and a strengthening dollar. Schiff had earlier flagged these record highs as warning signs rather than positive economic indicators. "Most people are clueless about what this means and are in for quite a shock," he said.
Background
Who is Peter Schiff?
Schiff is an American economist, fund manager, and founder of Euro Pacific Asset Management. He is known for his criticism of central banking systems and fiat currencies, advocating gold and precious metals as protection against inflation and monetary instability. Schiff gained notoriety for predicting the US housing bubble and the 2008 financial crisis long before they happened.