The BRICS alliance is challenging the U.S. dollar by aiming to dethrone it from the global reserve currency. The BRICS bloc has initiated various cross-border transactions by cutting ties with the U.S. dollar and using local currencies for trade. The alliance is looking to suffocate the U.S. dollar by not using the currency for global transactions. The move will make the U.S. dollar lose in the supply and demand dynamics and strengthen local currencies against the USD.
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Read here to know how many sectors in the U.S. will be affected if BRICS stops using the dollar for global trade. Considering the present scenario, economist Peter Schiff predicted what the future holds for the U.S. dollar and the American economy.
BRICS: Economist Peter Schiff Predicts the Future of the U.S. Dollar
Economist Peter Schiff predicted that the U.S. dollar is headed for a crash at a time when BRICS is dumping U.S. Treasuries, stocks, and government bonds. BRICS offloaded $123 billion in U.S. Treasuries this year and are getting rid of the dollar and equities and bonds.
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Schiff warned that the U.S. dollar could crash and the American standard of living would come down along with it. “The dollar will tank, taking the U.S. economy and the American standard of living down with it,” he said.
He warned that holding on to U.S. Treasuries is a risk, indicating that BRICS is getting rid of the dangers. “U.S. Treasuries are now the ultimate risk asset, as losses are guaranteed. There are only two possible outcomes, default & deflation, or devaluation & inflation. The latter option is more politically expedient, which means everyone who owns U.S. dollars will also get destroyed,” he predicted.
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In conclusion, economist Schiff predicts that the U.S. dollar will tank soon and experience an unprecedented downturn. He also forecasts that the American standard of living will fall along with the currency leading to job cuts. The uncontrolled debt crisis is also one of the reasons why BRICS and other countries are staying away from the U.S. dollar.