Pan Jing
Posted on Friday, August 18, 2023 at 11:38 PM GMT+5:30 Read 4 minutes
The United States dollar has been the world’s main reserve currency for many years. But this enduring supremacy, according to Lynette Zang, chief market analyst for ITM Trading, is in jeopardy.
She recently told Stansberry Research that “the days of the dollar being the world reserve currency are fast coming to an end.”
The transition started in 2002, according to Zang, when the Federal Reserve “first had to buy” U.S. debt. This action implied that either the globe was “saturated in it” or was not willing to purchase “enough of the U.S. debt that we were trying to shove down everybody’s throat.”
A lot of analysts are worried about America’s rising debt. The United States’ long-term foreign currency issuer default rating was recently reduced by Fitch Ratings from its top AAA rating to AA+. The decision was made, according to the credit rating agency, because of “expected fiscal deterioration over the next three years,” a “high and growing general government debt burden,” and a “erosion of governance.”
But Zang’s worries go beyond only the state of the dollar.
The bankruptcy of Silicon Valley Bank made national headlines in March. Depositors began to doubt the bank’s liquidity when it suffered a large loss on the sale of its portfolio of Treasury bonds, which sparked a bank run. Silvergate Bank, First Republic Bank, and Signature Bank all failed in the midst of this market turmoil.
Even though bank failures appear to be old news at this point, Zang thinks the issue continues.
“This banking crisis is not over,” she declared. “Perhaps they were able to cover it up, and now everyone is quiet, consumer confidence is rising, and all of this other nonsense. However, it is based on a false foundation.
Then Zang pointed at Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Janet Yellen.
She was blunt when describing these well-known individuals: “That’s what Powell’s job is, and that’s what Yellen’s job is… Their responsibility is to maintain public order and keep people within the framework of the system since doing so makes it simpler to steal money.
Zang has long promoted gold as a protective hedge if you’re looking for methods to safeguard yourself from this upheaval.
There haven’t been any significant changes in the gold market lately. Zang was asked what her message was for the spectators, and her answer was clear-cut.
“We are inside a huge hurricane, so I’m advising you take advantage of it and get everything in place. There is no question,” she remarked. “It’s not only that the dollar is dying. The entire financial, monetary, and social structure is dying.
A lot of nations are also creating central bank digital currencies (CBDCs). Zang forewarned that the introduction of CBDCs might result in limitations on the ability to purchase gold.
Because gold competes with other currencies like dollars, euros, yen, and other metals, she said, “it would be against the CBDCs.”
For thousands of years, gold has been used as a store of value.
The precious metal is a hedge against inflation because it has inherent scarcity, unlike fiat money, which can be manufactured in endless quantities.
At the same time, gold has long been seen as a safe-haven asset that offers investors protection from geopolitical and economic concerns. Given its global recognition and significance, the yellow metal has frequently been sought as a shelter during times of political instability, war, and other disasters.
If you agree with Zang, you can invest in gold by buying coins and bars from your neighbourhood bullion store or you may even consider setting up a gold IRA. Additionally, exchange-traded funds (ETFs) like the SPDR Gold Shares (GLD) provide access to the metal. Another approach to get exposure to the industry is through the stocks of gold mining firms.
Although gold doesn’t offer a payout, innovative businesses have developed inventive ways for investors to make passive income from assets that resist inflation. Here’s a fully hands-off way to invest in rental homes with as little as $100.