The US dollar collapse is happening right now, according to economist Peter Schiff’s recent and rather alarming warnings. His assessment highlights some pretty serious concerns about America’s financial stability in the midst of increasing market volatility and, well, the dollar’s gradually weakening position in global markets.
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Schiff’s Insight on US Dollar Collapse, Market Volatility, and Security Risks
Fed Policy Dilemma
On May 6, Schiff shared his rather stark US dollar collapse prediction through social media platform X, and his message was certainly not reassuring for investors worried about security risks.
Schiff stated:
“The U.S. dollar is about to free fall and gold will soar to heights few can imagine. The only way to end America’s massive trade imbalance is to end the dollar’s role as the global reserve currency.”
The U.S. dollar is about to free fall and gold will soar to heights few can imagine. The only way to end America's massive trade imbalance is to end the dollar's role as the global reserve currency. Gold is the only monetary asset that can replace the dollar. Buy $EPGIX today.
— Peter Schiff (@PeterSchiff) May 6, 2025
His criticism also extended to Federal Reserve Chair Powell’s recent statements, which at the time of writing, Schiff interpreted as revealing some really significant security risks for investors. After the Fed maintained interest rates between 4.25% and 4.5%, market volatility concerns have definitely increased quite a bit.
Schiff said:
“Reading between the lines here’s what Powell said. We’re in a lot of trouble. The economy is weak and getting weaker, but the Fed can’t cut rates as inflation is getting stronger. In fact, we should be hiking rates, but we can’t do that either without creating a financial crisis.”
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China’s Role in US Dollar Collapse
The US dollar collapse scenario that Schiff describes isn’t just theoretical speculation anymore. He specifically addressed China’s changing relationship with America, which is creating additional regulatory uncertainty in global markets right now.
Schiff explained:
“I think China has made the decision to move away from the U.S. That means they stop propping up the dollar and lending us money so they can keep selling us stuff we can’t afford.”
He further warned about consumer behavior during this potential US dollar collapse:
“The dollar will be losing purchasing powers, encouraging people to spend them as fast as they can.”
Investment Implications
Schiff basically dismissed investor Bill Ackman‘s proposal for tariffs on Chinese imports as an ineffective solution to America’s economic imbalances. The ongoing market volatility requires investors to reconsider traditional strategies, especially in light of current trends.
Security risks associated with dollar-denominated assets make alternative investments, such as gold and perhaps certain commodities, more attractive for many investors right now. The regulatory uncertainty has created a rather complex environment for financial decision-making across all asset classes, including bonds and equities.
Systemic Problems
The core of Schiff’s warning about the US dollar collapse centers on America’s persistent trade deficits and, well, what he sees as unsustainable monetary policies that have been in place for years now. The Federal Reserve’s effectiveness has apparently diminished as it faces somewhat contradictory objectives in the current economic climate.
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This financial dilemma exposes security risks that were previously masked by the dollar’s reserve status. As global systems potentially transition away from US dollar dominance, market volatility will likely intensify even further, which seems to validate Schiff’s concerns about a US dollar collapse in the not-too-distant future.