To The Moon

Peter Schiff's latest prediction is stark: the US dollar is on the brink of collapse, to be replaced by gold as the primary central bank reserve asset, leading to an economic crisis that will dwarf 2008. In his view, the "free ride" on global capital flows ends as deficits force painful adjustments through financial repression rather than growth. This aligns with his long-standing thesis: endless debt, currency debasement, and loss of reserve status. While Schiff has been early (and sometimes wrong) on timing, his warnings have merit given current pressures.

Current Context (as of Dec 23, 2025)

• DXY hovers near 96.7, testing 15-year support after a sharp fall from overvalued peaks.

• Gold at $4,503 (50th record high this year), silver at $66 (all-time high).

• US debt ~$39T, with $4.2T maturing in 2026 at higher yields.

• BRICS + aligned nations account for >50% of global central bank gold buying.

• Fed funds at 3.5%-3.75% after 25bps cut; dot plot median only 25bps easing in 2026.

Bull Case (Dollar Collapse Unlikely in Near Term)

• DXY support at 96-98 has held for years; strong US growth (Q3 GDP +2.8%) and energy independence provide resilience.

• Gold's rally is driven by CB buying and rate cuts, not dollar death – CBs still hold ~60% reserves in USD.

• Schiff's track record: Correct on 2008 directionally, but missed post-2020 recovery; gold has risen but dollar remains dominant.

• Fed's hawkish dot plot (7 officials see 0 cuts in 2026) limits extreme debasement.

Bear Case (Schiff's Warning Has Teeth)

• Debt servicing costs now rival defense spending; 2026 rollover at higher yields could add $200B+ annual interest.

• BRICS de-dollarization (gold hoarding, new settlement systems) accelerates if tariffs escalate.

• Carry trade unwind from BoJ hike + Fed pause drains liquidity, pressuring risk assets.

• Historical precedent: Major reserve shifts (sterling → dollar) took years but were preceded by similar deficit + policy warnings.

Historical Crises vs Today Snapshot

Verdict & Trade Plan Schiff's scenario is a tail risk, not base case for 2026 – dollar dominance erodes gradually, not collapses overnight. Gold's structural bid is real, but extreme collapse requires multiple failures (recession + fiscal crisis + BRICS shift). Exposure to hard assets (gold/silver) makes sense for diversification, but don't go all-in on doomsday.

Recommended Positioning

• Gold: 5-10% portfolio (GLD ETF or physical bars for long-term).

• Silver: Smaller tactical allocation (SLV) for industrial leverage.

• Equities: Defensive tilt (utilities, staples) + selective EM (India/China recovery plays).

• Avoid: Over-leveraged USD carry trades.

Key Takeaways

• DXY testing 15-year support – break risks accelerated de-dollarization.

• Gold's 50th record reflects CB buying + rate-cut bets, not imminent dollar death.

• Schiff's warning is directionally plausible long-term but timing is uncertain.

• Diversify into hard assets while maintaining equity exposure for growth.

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📝 Disclaimer: This post is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.

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