{"id":1536732,"date":"2025-05-18T14:30:00","date_gmt":"2025-05-18T18:30:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1536732"},"modified":"2025-05-18T14:30:00","modified_gmt":"2025-05-18T18:30:00","slug":"schiff-on-metals-miners-dollar-bubble-burst-will-humble-the-economy","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/schiff-on-metals-miners-dollar-bubble-burst-will-humble-the-economy\/1536732\/","title":{"rendered":"Schiff On Metals & Miners: Dollar Bubble Burst Will Humble The Economy"},"content":{"rendered":"

Schiff On Metals & Miners: Dollar Bubble Burst Will Humble The Economy<\/span><\/p>\n

\n

Via SchiffGold.com,<\/em><\/a><\/p>\n

Peter recently joined\u00a0Metals and Miners\u00a0<\/a>host Gary Gohm to discuss a range of economic topics, from consumer debt to the fragility of the U.S. dollar and the shifting global reserve landscape. He explains how reckless borrowing\u2014by both consumers and governments\u2014ties into the bigger story of\u00a0unsustainable dollar dominance<\/a>\u00a0and its consequences for economic security,\u00a0inflation<\/a>, and the gold market.\u00a0<\/p>\n<\/p>\n

Peter opens with a candid take on the psychology of\u00a0U.S. consumers facing mounting financial strain.<\/a>\u00a0He notes that for many deeply in debt, there\u2019s little incentive to curb borrowing when bankruptcy feels inevitable:<\/p>\n

And I think that the people who are trying to borrow more money out of desperation, they probably don\u2019t even care that they can\u2019t pay the money back.<\/strong>\u00a0<\/em><\/p>\n

They just want to borrow more. And in fact, once you\u2019ve already borrowed more than you can possibly repay, and you know it\u2019s just a matter of time before you file for bankruptcy, you may as well go out with a real bang. I mean, so you might as well just take out as much additional credit. <\/em><\/p>\n

So the consumer has no qualms about refinancing a house that is going to go into foreclosure anyway, or maxing out a credit card that he has no intention of paying, or signing up for buy now, pay later, when in his mind it\u2019s \u2018buy now, pay never.\u2019<\/strong><\/em><\/p>\n

Steering the conversation to the foundation of this unchecked borrowing, Peter highlights the even larger bubble inflating quietly in the background: the U.S. dollar and Treasury markets. He argues that\u00a0it\u2019s this inflation that fuels trade imbalances\u00a0<\/a>and the erosion of American manufacturing\u2014not foreign \u201ccheating\u201d or tariffs as some officials claim:<\/p>\n

Well, first of all, the biggest bubble of them all is the one in the US dollar and in US treasuries.\u00a0<\/strong><\/em><\/p>\n

And that\u2019s what\u2019s been enabling these massive trade deficits that Secretary Bessent said are responsible for hollowing out our industrial base, decimating our supply chains, sacrificing our economic security.\u00a0<\/em><\/p>\n

All that stuff is true as to what\u2019s happened, but he\u2019s got the cause wrong. He\u2019s blaming all these problems on foreigners cheating through tariffs and non-tariff barriers. But that\u2019s got nothing to do with it.<\/strong><\/em><\/p>\n

Peter then zeroes in on a risk most policymakers won\u2019t acknowledge: the vulnerability of American banks if confronted with a stagflation scenario. He explains that stress tests run by the Federal Reserve ignore\u00a0the one scenario that could truly expose the banking system\u2019s weaknesses<\/a>:<\/p>\n

Well, it\u2019s extremely exposed.<\/strong> And in fact, you know, stagflation, a combination of a weak economy and rising interest rates, is the one scenario that the Fed never stress tested any of the banks for.\u00a0<\/em><\/p>\n

The Federal Reserve, in its most worst case adverse scenario, where there is a massive recession with high unemployment, they assume that interest rates go back down to zero, and that treasury bonds yields collapse.\u00a0<\/em><\/p>\n

They did not run a stress test where you have a recession with high unemployment, but inflation and interest rates go up, not down. \u2026 They\u2019d all fail under a really adverse scenario.<\/em><\/strong><\/p>\n

Shifting the focus to where big players are moving their assets, Peter notes that central banks are already well into the process of selling dollars and U.S. government debt in favor of gold. He argues that this transition is still in its early stages, with\u00a0gold\u2019s price set to climb much higher\u00a0<\/a>as a result:<\/p>\n

We\u2019re just headed higher to 4,000 and beyond. But gold is what central banks are buying as they are selling dollars.\u00a0<\/strong><\/em><\/p>\n

They are moving reserves from dollars to gold, which means they\u2019re not buying treasuries either or mortgage backed securities.\u00a0<\/em><\/p>\n

And we\u2019re still early in that process.<\/strong> It\u2019s been going on for a couple of years, but it\u2019s still got a long way to go.<\/em><\/p>\n

Peter ties his argument together by recalling how the U.S. has used the dollar\u2019s global reserve currency status as a crutch to maintain lifestyles that outstrip domestic production and savings. As\u00a0the world moves away from the dollar<\/a>, he warns, Americans will be forced to return to more sustainable habits\u2014producing and saving rather than consuming and borrowing:<\/p>\n

The changes that I am referring to have to do with the fact that we\u2019ve been able to get a free ride on the global gravy train.<\/strong>\u00a0<\/em><\/p>\n

We\u2019ve been able to exploit the reserve status of the US dollar to live beyond our means. We\u2019re able to consume as a nation more than we collectively produce, and we\u2019re able to borrow a lot more than we collectively save.\u00a0<\/em><\/p>\n

And so our standard of living, right, our ability to buy stuff, has been enhanced by taking advantage of the dollar\u2019s role. Without the dollar as a reserve currency, we\u2019d have to produce more, which means we\u2019d have to save more.<\/em><\/strong><\/p>\n

For more of Peter\u2019s insight, check out\u00a0his other recent interview<\/a>\u00a0on the Mining Network!<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nSun, 05\/18\/2025 – 10:30<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/schiff-metals-miners-dollar-bubble-burst-will-humble-economy<\/a>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Schiff On Metals & Miners: Dollar Bubble Burst Will Humble The Economy Via SchiffGold.com, Peter recently joined\u00a0Metals and Miners\u00a0host Gary Gohm to discuss a range…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1536732","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1536732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1536732"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1536732\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1536732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1536732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1536732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}