According to a recent warning from economist Peter Schiff, the US dollar collapse is happening now. His rating highlights some serious concerns about the US financial stability amid increasing market volatility and the gradually weakened position of the dollar in global markets.
Schiff’s insights into US dollar collapse, market volatility and security risks
Fed policy dilemma
On May 6, Schiff shared his rather harsh US dollar collapse forecast through social media platform X. His message certainly didn’t feel at ease for investors worried about security risks.
Schiff said:
“The US dollar is free, and gold soars to a height that is almost unimaginable. The only way to end the imbalance of America’s massive trade is to end the dollar’s role as a global reserve currency.”
The US dollar is free, and gold soars to a height that is almost unimaginable. The only way to end the imbalance of American massive trade in America is to end the role of the dollar as the global reserve currency. Gold is the only financial asset that can replace the dollar. buy $ epgix today.
– Peter Schiff (@peterschiff) May 6, 2025
His criticism also extended to a recent statement from Federal Reserve Chairman Powell. This was interpreted as revealing security risks that are very important to investors at the time of writing. Market volatility concerns have definitely risen considerably after the Fed maintains interest rates of 4.25% to 4.5%.
Schiff said:
“Reading between the lines here is what Powell said. We’re in a lot of trouble. The economy is weak and weak, but the Fed won’t lower the rate because of strong inflation. In fact, we should be a hiking rate, but we can’t do that without causing a financial crisis.”
China’s role in the collapse of the US dollar
The US dollar collapse scenario described by Schiff is no longer a theoretical speculation. He is particularly addressing the changing relationships between China and the US, and is currently creating additional regulatory uncertainty in the global market.
Schiff explained:
“I think China has decided to leave the US, meaning they’re going to stop supporting the dollar and lending money to us so that we can continue selling what we can’t afford.”
He further warned of consumer behavior during this potential US dollar collapse.
“The dollar loses purchasing power and encourages people to use them as soon as possible.”
Impact on investment
Schiff basically rejected investor Bill Ackman’s proposal for tariffs on Chinese imports as an effective solution to the US economic imbalance. Continuous market volatility requires investors to rethink their traditional strategies, particularly in light of current trends.
Security risks associated with assets controlled by dollars are now more attractive to many investors, making alternative investments, such as gold and possibly certain products. Regulatory uncertainty has created a rather complex environment for financial decision-making across all asset classes, including bonds and equities.
Systematic issues
The core of Schiff’s warning about the collapse of the US dollar is centered on the US permanent trade deficit and what he considers as an unsustainable monetary policy that has existed for years. The effectiveness of the Federal Reserve is clearly declining as it faces somewhat contradictory objectives in the current economic situation.
This financial dilemma reveals security risks previously hidden by the dollar’s reserve state. Market volatility is likely to be further strengthened as the global system may move away from US dollar control, which appears to validate Schiff’s concerns about the US dollar’s collapse in a not too distant future.
