US Dollar Free Fall? Schiff Predicts End of Reserve Currency Dominance

Economist Peter Schiff has once again sounded the alarm on the U.S. dollar, predicting a sharp decline as global markets reconsider its status as a reserve currency. Schiff argues that the only way to resolve America’s trade imbalance is to abandon the dollar’s dominance in international finance.

Schiff’s Dire Warning on the Dollar’s Future

As economic uncertainty looms, Schiff insists that the U.S. dollar is on the verge of a major collapse. He recently stated, “The dollar is losing its purchasing power, and the only way to fix America’s trade deficit is to end its role as the world’s reserve currency.” His remarks come amid growing concerns over inflation, rising interest rates, and global de-dollarization efforts.

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.

— Peter Schiff (@PeterSchiff) May 7, 2025

Current U.S. Dollar Price and Market Trends

As of May 7, 2025, the U.S. dollar index (DXY) stands at 99.48, reflecting a 0.25% increase from the previous trading session. Against the Indian Rupee, the dollar is valued at 84.81 INR per USD. Meanwhile, the euro trades at 0.88 USD, and the British pound at 0.75 USD. These fluctuations highlight the dollar’s shifting position in global markets.

Impact of U.S.-China Trade Relations

The ongoing U.S.-China trade war has exacerbated fears of a dollar decline. Schiff warns that China’s increasing reliance on alternative currencies could accelerate the dollar’s downfall. According to a recent report, China and Russia have been actively reducing their dollar holdings, opting for gold and other reserve assets.

Federal Reserve Policies and Inflation Concerns

The Federal Reserve’s monetary policies have played a crucial role in shaping the dollar’s trajectory. Schiff argues that the Fed’s rate hikes and quantitative easing measures have weakened confidence in the dollar. He noted, “The Fed’s reckless money printing has inflated asset bubbles, and when they burst, the dollar will take the biggest hit.”

Here’s a table comparing the U.S. dollar to other major currencies as of May 7, 2025:

These exchange rates indicate the U.S. dollar’s strength against various global currencies

Global Shift Toward Alternative Currencies

Countries worldwide are exploring alternatives to the U.S. dollar. Schiff believes that gold-backed currencies could replace the dollar as the preferred global reserve asset. He stated, “Central banks are stockpiling gold at record levels, signaling a shift away from the dollar.”

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