Is a currency crisis upon us?
The U.S. money supply has exploded since the COVID-19 public health crisis, with the Federal Reserve creating 40 percent of all dollars ever created in just two years.
Put simply, the Eccles Building added trillions to the money supply, eviscerating Americans’ purchasing power.
But it was not only Washington that embarked upon this reckless endeavor. It was why every advanced and developing economy, which is why a place like Turkey has an inflation rate of 86 percent and why the European Union has an inflation rate of 10 percent.
All of this could exacerbate the global inflation crisis, warns Peter Schiff, the chief global strategist at Euro Pacific Capital.
“It’s actually going to be much worse than that. This is just the beginning. I think we’ve been in a stealth recession all year,” Schiff told Fox News. “But I think the recession is going to get much worse in 2023. But what’s also going to get a lot worse is inflation. Because one thing that has kept the lid on consumer prices in 2022 has been the strength of the dollar. But I think the dollar has lost that strength.”
“I think we’re going to have a currency crisis in 2023, and that’s going to fuel the inflation fire just as the unemployment rate is really spiking and this recession is kicking into a higher gear,” he added.
The U.S. Dollar Index (DXY), which gauges the greenback against a basket of currencies, has plunged more than four percent since hitting a peak of 114.78 in October. With the Federal Reserve hinting at a slowdown in rate hikes, and the market penciling in a rate cut at the end of 2023 or early 2024, the buck’s best days could be over.
Of course, the only reason why the dollar has survived everything has been the ineptitude of central banks everywhere.
Why would anyone hold the euro, the pound sterling, or the Japanese yen?
Here is the full interview?
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