Fiat Currency Apocalypse Approaches as Central Banks Dump Dollars for Gold
Author: Ilya Tsukanov
Date: 2024-08-11
Category: Business
US Federal Reserve Chairman Jerome Powell and El Salvadoran President Nayib Bukele have raised concerns about the sustainability of US debt levels and the Fed’s strategy of printing money out of thin air. Central banks are shifting away from dollar-denominated assets towards gold as a more stable and reliable alternative.
Recent IMF estimates show a decline in dollar and US Treasury-denominated foreign reserves, with countries like China, Ukraine, Norway, Brazil, Switzerland, and Israel reducing their yuan holdings. Central banks purchased over 1,000 tons of gold in 2023, with China and India leading the trend.
El Salvadoran President Nayib Bukele warned that financing the US government through Treasury bonds backed by printed money is unsustainable and could lead to a currency crisis. Countries are increasingly diversifying their reserves due to geopolitical risks and the looming threat of a global financial meltdown.
Will gold replace the dollar? The global shift towards gold as a reliable asset raises questions about the future of fiat currencies and the stability of the dollar in the face of economic uncertainty.