The dollar index broke below 90 last week for the first time since the spring of 2018. The growing weakness means a major decline is coming for the greenback in 2021, says veteran stockbroker Peter Schiff.
“And it’s not going to end in 2021. This is going to be another multi-year bear market in the dollar,” he said in his podcast. According to Schiff, we will take out the all-time record low in the dollar index from 2008 which was 71.58.
“So, we’ve got a long way to fall to get down there. We’ve got about 20 points. But then it’s an even bigger drop in uncharted territory once we take out 70.”
He pointed out that the weak labor market puts more pressure on Congress and the Federal Reserve “to do something.”
“Of course, what they do is just create more inflation because they somehow think there’s a tradeoff, and if we have more inflation, we’ll have less unemployment. In reality, we’re going to have more unemployment because of more inflation. And even the people who are employed are going to suffer as a result of the rising cost of living.”
The weakness in the dollar should be a warning sign that the game is coming to an end for the Fed and all of the money printing and quantitative easing, Schiff said. There’s a good chance the regulator’s balance sheet could smash $10 trillion by the end of 2021.
According to the economist, the only reason the US economy works is because of the overvalued dollar. “The only reason the Fed has been able to get away with all the stimulus and the bailouts is because the world has made it possible by buying up all those dollars. But now that the world doesn’t want those dollars, and is in fact starting to hemorrhage those dollars — this whole process is going to unravel.”
For more stories on economy & finance visit RT’s business section
