Peter Schiff: The Russians Are Buying Gold to Prepare for the Impending Dollar Crisis
Russia once again added to its growing gold reserves in April, buying another 15.55 tons of the yellow metal. According to a press release from the Central Bank of Russia, it now holds 2,183.46 tons of gold.
Russia has expanded its gold holdings by 71.53 tons through the first four months of 2019. Russian gold reserves increased 274.3 tons in 2018, marking the fourth consecutive year of plus-200 ton growth. Meanwhile, the Russians sold off nearly all of its US Treasury holdings. According to Bank of America analysts, the amount of US dollars in Russian reserves fell from 46% to 22% in 2018.
In an appearance on RT, Peter Schiff said he thinks the Russians are preparing for an impending dollar crisis.
As Peter explained, the world has been on a dollar standard ever since the US led the world off the gold standard.
That was fine when the dollar was backed by gold, but now the dollar is backed by nothing. So, if you’re backing your currency with a currency that’s backed by nothing, well, then your currency is backed by nothing.”
Peter said this wasn’t a problem when people perceived value in the dollar, but he thinks that’s going to change.
I think the next recession when the Fed goes back to zero and when we launch QE4, I think the dollar’s role as a reserve currency is going to be questioned, and central banks need an alternative. And the only viable alternative to back up their own currency is real money, which is gold.”
Peter also talked about the fact that the US uses the dollar as a weapon.
Other countries don’t like this, and to the extent that they can move away from the dollar, well then they kill two birds with one stone. And one way of doing that is to increase their gold reserves now while gold is still cheap. Because when the dollar really starts to tank, the price of gold is going to soar. Russia, right now, obviously wants to buy as much gold as it can while the price is still relatively cheap. That allows it to build up a bigger hoard of gold to replace the diminished value that the dollar is going to play as a reserve currency.”
That would help increase the value of the yuan and that would help increase the purchasing power of their own citizens while really dealing a fatal blow to the dollar and the US economy at the same time.”
The RT anchor asked if it was really possible for other countries to actually ditch the US dollar. Peter said it’s not only possible, it’s inevitable.
Ultimately, the US won’t have any leverage at all … This [the dollar as the reserve currency] was an exorbitant privilege that the US has enjoyed for decades, but it has abused that privilege dramatically, even more so recently with the sanctions. So, I think that privilege is going to be lost and with it will go the artificially high standard of living that came along with it in the United States.”
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