According to investor Peter Schiff, the dollar will only depreciate in the ongoing trade war with China. Schiff claims the notion of a “dollar shortage” because of the tariffs on Chinese goods is “complete nonsense.”
“The thinking is – at least when it comes to trade – is that the dollar is going to benefit from a trade war, which I think is wrong. I think it’s just as wrongheaded as the concept that the dollar is going to benefit from larger budget deficits,” Schiff said, according to Seeking Alpha.
President Donald Trump has levied even more tariffs on Chinese imports in retaliation for China’s retaliation after the US announced its first round of tariffs. A lot of people seem to think this is bullish for the dollar and as a matter of fact, the greenback has surged in recent weeks. But in his latest podcast, Peter Schiff said this is a bunch of nonsense. “The force will not be with us,” is the aptly named podcast in which Schiff discusses the collapse of the United States dollar.
Peter called the notion that budget deficits make for a “strong dollar” an “asinine theory.” The enormous deficit coupled with the Fed shrinking its balance sheet means we will see trillions of dollars in Treasuries hit the market, and that’s not a good thing for the greenback.
“The thinking is – at least when it comes to trade – is that the dollar is going to benefit from a trade war, which I think is wrong. I think it’s just as wrongheaded as the concept that the dollar is going to benefit from larger budget deficits.“
He explains that the excessive amount of dollars will be provided by the mint of US treasury bonds.
“You’ve got a treasury, you’ve got a dollar. I mean, what’s the difference between a 30-day treasury bill and a dollar? You know, they’re pretty much the same thing. The only difference is people don’t readily spend their treasuries, right? They don’t go into a store and purchase something with a treasury. But they can. They can cash it in and buy something. But they’re effectively dollars. So, even though the Federal Reserve, in theory, will be shrinking its balance sheet, the US government will be expanding its balance sheet.”
Schiff says as the supply of dollars is going to grow and grow, the demand for the American currency can fall, while the US Fed will be unable to stop the dollar’s demise. Schiff says that what is coming for Americans, is massive inflation.
“Eventually, what’s going to happen is it’s going to be the demand for those dollars is going to collapse, not the supply. And when the demand for dollars collapses, then the price of the dollar collapses. You get massive inflation. That is what is coming.”
Peter Schiff, who accurately predicted the 2008 recession has been warning of a dollar collapse for some time now. The “phony recovery” experienced in the US will not last forever, and inflation of epic proportions is on the horizon.
“According to investor Peter Schiff, the dollar will only depreciate in the ongoing trade war with China.”
“According to investor Peter Schiff, the dollar will only depreciate in the ongoing trade war with China.”
1. A cheaper dollar makes our goods less expensive to overseas buyers. It helps our balance of trade. China got to be the economic powerhouse it is by keeping the Yuan cheap compared to the dollar.
2. China absolutely does NOT want #1 to happen for the reason stated. Additionally, most of its foreign reserves are in dollars which would loose value if #1 happened.
“…as a matter of fact, the greenback has surged in recent weeks. … Schiff said this is a bunch of nonsense.”
No Peter it is a matter of fact. Dumbass.
The only reason anyone would listen (or post) comments by Schiff is if they are economically illiterate.
In sort of related news, Harley-Davidson to move some production out of the US to avoid EU tariffs.
That article is so misleading. Harley already manufactures in Europe and they are increasing that capacity. That is a good thing in my book.
Trump is the first POTUS that really understands how to negotiate with Asia. Before he’s done we will all hear some scary rhetoric. It ain’t over until it’s over.
Peter, you need a T-shirt that says: “I survived Trumps nuclear war with North Korea.”
I saw an article that warned the US was seeing signals of a recession because the Bond Yeild curve is pointing down. Another red herring. A recession is a shrinking economy, the real economy is actually growing. The yield curve is simply responding to increased demand as the FED raises interest rates. The FED may be the Trump economies biggest enemy, but they can’t be too obvious about attacking it.
For as much as these people hate Trump for fixing the economy, all their bluster can’t make the economy crash. Yes the economy may crash, in the future, but as long as the Trump Admin keeps removing obstructionist federal regulation, going after corrupt politicians, correcting giveaway trade agreements, encouraging business through tax cuts, the economy will grow.
Remember the progressive trade agreements of the Clintons, Bushs and Obama were intended to redistribute American wealth, if Trump stops this bleeding, it will be a huge win for the economy. I’m not seeing a downside yet!
When the first Hurricane hit Texas last year, I bought Home Depot stock, because people are resilient and want to rebuild and Trump provided assistance. Several other big storms, plus fires in California. Americans rebuilt and continue to prosper even in the face of disasters.
I have to say, my stock purchase in less than a year is up 50%. If I listened to Peter Schiff, I’d have lost money following his advise.
I have home and car insurance because because bad stuff happens. I prep because bad stuff happens. I don’t spend my life in fear of an economic crash because historically 90% of the time the economy grows. The times the market has crashed, I made the most money because I knew it could happen and had a plan.
Buy gold and silver coins. Not just because they are insurance against inflation, but because we need a medium of exchange that has intrinsic value. The funny money is worthless. It keeps us down.
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B from CA from L in AL: I am retired and see the money devalued over decades. $50 for several small grocery bags used to be $5. when I was a kid and needed two kids to carry it up the road. I recently used worthless bank notes to buy several prs Brooks walking/jogging shoes,when walking out the door, realizing they took devalued bank notes. Muni’s can help retirees w/ expenses, better pay out than anything else. Medical bills, surgery co pays more so, the older people get even w/ secondary insurance.
Personally, I take it as an article of faith, through a bit of knowledge, that trillions of debt in the form of treasuries owned by China, etc. will be released as they and others notice the yields on treasuries climb. Treasuries rise in yield based on the Feds efforts to make them attractive buys. High yields make large holders motivated to sell some or all of them, in order to get a good return, which pushes inflation, and more sales of treasuries in order to re coup inflation losses, which pushes against dollar value. Ten year treasuries remain near or over 3%. It has already pushed inflation. Ten year treasuries are the barometer to watch. We are already in a low intensity civil war. As the war heats up and expands, watch what happen to treasuries.
Sean: After hearing about how the Left and their squad of rude, vile goons want to really push it with Administration Cabinet Members, staff, etc, etc and harass them and yell and scream and chase after them and make their personal lives miserable, I for one am willing to crack their skulls and see when they are ready to pull that garbage again on someone…it all boils down to the Left is just common trash, seriously messed up in their empty heads and have no manners nor morals. The way this administration and cabinet members are being treated is so unbelievable and amazingly hypocritical. You cannot literally do anything with any of them over there. . .
For the most part, I have about NO faith in the Gov’t every which way. And I think the economy is a mess deep down. They talk about jobs, the thing is most of these “jobs” are trash! And they pay crap money, part-time, no benefits and on and on. Again the vast majority of it all is fake, manipulated, corrupt, phony mess. I am very confident it will all implode.
CC, I agree. And the debt will be defauted on no matter what happens. It’s literally impossible to pay it.
DB,
We literally cannot “Default” on our debt.
I’m old enough to get Social security( I haven’t applied yet)
but most that debt is owed to people like me.
Cut my mother’s social security, she’ll have
to move in with me or my sister.
Mom will then quit voting for Democrats.
Democrats caused the problem and will not allow it to be solved, that will change, as we get rid of them or they figure out that they will not survive if they don’t adapt.
The debt will be monetized, time will come when loaf of bread will cost a 1000 dollars or more, country will be in worse condition than Venezuela now
Meanwhile Harley Davidson is moving some production jobs to Europe to avoid the tariffs resultant from the trade war President Trump started with the EU. It comes to about $2200 per bike, so it’s not chump change.
Too bad POTUS doesn’t fully understand the consumer is the one paying for the trade wars he’s starting.
Wait. Didn’t Trump tout jobs at Harley Davidson as one of his initial “accomplishments”?
Historically, tariffs cause depressions, not inflation.
Especially when things are as over priced as they are now
eg. Houses, equities, and PM’s.
Contrary to popular belief, most American debt is owed to Americans, not foreign nations.
Were it not for Democrat policies on the environment, energy, and their stranglehold on unions and government, America would easily surpass China and Europe in production of goods and the rest of the world in energy production.
Our problem is internal politics.
Schiff has been saying the economy is going to hell for years now fear porn if he were paid for his accuracy he would be a poor man
“Were it not for Democrat policies on the environment, energy, and their stranglehold on unions and government, America would easily surpass China and Europe in production of goods”
This!
BLAH BLAH BLAH. over 10 years now and he is still saying the same damn thing!!!
Sgt.
Is this an example of how quickly we forget?
In July 2008 the recession began in earnest.
In August 2008, Fannie and Freddie went bankrupt.
In September 2008, stock market crash.
In October 2008, $700 billion bank bailout bill – out tax dollars to bail out the very prevaricators who caused the problems in the first place. Those same liars, cheaters, deceivers, perjurers and con artists are still running the same show today. The definition of insanity is believing things will turn out any differently this time around. In fact, it will likely be much, much worse.
Nope Peter is full of hot air. As long as the USA military can enforce the trading of oil and many commidites in the USA digital Petro Dollar things will pretty much stay the way they are at the present.