Economist Peter Schiff Warns US Dollar Collapse ‘Inevitable’

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Economist Peter Schiff Warns Dollar Collapse Inevitable Following US Rating Downgrade

Economist Peter Schiff has warned of an impending collapse of the U.S. dollar even though he sees Fitch’s downgrade of the U.S. rating this week as “meaningless.” While cautioning about a financial crisis and a crash, Schiff emphasized: “Given the trajectory of U.S. government deficit spending, a dollar collapse is inevitable.”

Schiff on US Rating Downgrade, Crash, Dollar Collapse

Economist and gold bug Peter Schiff warned of a U.S. dollar collapse and the challenges faced by the U.S. economy in a series of tweets this week. His warnings come after Fitch Ratings downgraded the United States’ long-term foreign-currency issuer default rating from AAA to AA+. Fitch is one of the three largest credit rating agencies in the U.S.

Noting that “Fitch downgrading U.S. Treasuries to AA+ from AAA is meaningless, as Treasuries are junk bonds,” Schiff tweeted on Wednesday:

When it comes to rating sovereign credit, the primary risk is currency depreciation, not default. Given the trajectory of U.S. government deficit spending, a dollar collapse is inevitable.

The rating firm also replaced the “negative watch” it previously placed on the U.S. and assigned a “stable outlook” instead. In a follow-up tweet, Schiff wrote: “Even more ridiculous is that Fitch has the [U.S.] outlook as ‘stable.'”

In another tweet, the economist opined: “Credit ratings don’t matter as the U.S. probably won’t default, but a soaring national debt does matter as the U.S. will print, driving down the value of the dollar. That reduces the real value of Treasuries. If we get hyperinflation that is basically the equivalent of default.”

Schiff also cautioned that the U.S. economy is on a course toward a crash. The gold bug explained that rising Treasury yields will lead to “larger federal budget deficits, a weaker economy, a falling dollar, rising current account deficits, higher unemployment, lower stock & real estate prices, a financial crisis, ramped up QE, and higher inflation.”

He tweeted on Thursday:

Treasuries are collapsing as oil prices surge … Once the dollar falls with Treasuries and gold rises with oil, the party is over. Say goodbye to a soft-landing and brace for impact. Recession + higher inflation = crash.

Do you agree with economist Peter Schiff about the U.S. economy and the dollar? Let us know in the comments section below.

Source: Bitcoin News

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