Shrinking Ink & Paper Dollar as Wall Street prognosticator predicted the 2008 US financial meltdown

Formula for “collapse:” Fed prints more in 2 years than in the past 100 years.

Will The US Go Bankrupt After The World Abandons The US Dollar?
Peter Schiff is the Wall Street prognosticator who successfully predicted the 2008 US financial meltdown. He told Russian media a week ago that the global reserve currency status has never been eternal, saying that the US dollar is on its way out. He added that the entire US economy is now based on the dollar as the world's primary reserve currency. It is the secret to making the US economy work. Once the dollar is just no longer the main reserve currency, the game is over.

Peter Schiff: The Dollar’s Loss Is Not America’s Win
The big story last week was the dollar’s slow meltdown. The dollar index broke below 90 for the first time since the spring of 2018.

The financial media hasn’t ignored the dollar weakness, but Peter said they don’t seem to grasp the significance of what’s going on, nor do they realize how much further the dollar has to fall. In fact, a lot of the talk has focused on the positives of dollar weakness. In his podcast, Peter argues this growing dollar weakness is not America’s win.

Peter said he thinks all of this is setting the stage for a major decline in the dollar in 2021.
Weekly jobless claims continue to spike upward. Last week we saw 885,000 Americans file first-time unemployment claims. The weak labor market puts more pressure on Congress and the Fed “to do something.”
Peter said the idea that a weak dollar is somehow a positive for the economy is nonsense. Think back to the last time was had a bear market in the dollar. The price of oil went up to $150 a barrel. That was the era of $4-plus a gallon gas.

The inflation signs are already there. Oil is pushing back close to $50 a barrel.

Pundits think that a weak dollar gives US exporters a competitive advantage. Peter said that’s not really true. Countries export so they can import. Societies don’t really want currency. They want products.
Trade is based on comparative advantage. If one country can make product Y more cheaply and efficiently than another country, and that other country can make product X more cheaply and efficiently, both benefit from trading. A country can create a surplus of its product, sell it, and use the earnings to buy something else.
The weakness in the dollar should also be a warning sign that the game is coming to an end for the Fed and all of the money printing and quantitative easing.

In the week reflected by the latest Federal Reserve data, the central bank’s balance sheet surged by $120 billion. It now stands at $7.363 trillion. It was the biggest increase in the balance sheet since May – the early days of QE infinity. Peter said he thinks there’s a good chance we could see a $10 trillion Fed balance sheet by the end of 2021.

There was also a $228.1 billion increase in the money supply as measured by M2.
The number of Treasuries on the Fed balance sheet has doubled since the beginning of the year.
This gets to the root of why the weakening dollar is a warning sign. As long as the dollar was stable and strong, the Fed could create as many dollars as it pleased. As long as there was a strong demand for dollars, the central bank could increase the supply of dollars with no problem. That’s how the Fed can hold interest rates artificially low even as the US government borrows billions of dollars every month. The Fed can keep bond prices supported through QE bond purchases – in effect creating artificial demand for bonds. But Peter has been saying for years that the Fed is sacrificing the dollar to prop up the bond market, along with stocks, real estate and the broader economy.
On top of that, the US is running a massive trade deficit. The US is effectively putting $80 billion or so into the global economy every month. The world doesn’t need those dollars to buy US exports. By definition, that’s the deficit. They’ve bought all the products they need and they’ve got $80 billion left over.
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Peter Schiff
Difference Frames the World