Schiff w/ Diesen: A Weaker Dollar Is the Solution

In last week’s interview with Glenn Diesen, Peter walks listeners through why a falling dollar is not the catastrophe many fear but rather an unavoidable correction that could actually help the global economy adjust. He ties the currency outlook to fiscal excess, crony protectionism, the Fed’s politics, and a coming sovereign debt crisis — and argues that sound money and foreign assets are the right way to prepare.

He starts by reframing the dollar’s weakness as part of the fix rather than the problem, explaining how decades of foreign demand for dollars created unsustainable imbalances and a foundation of trade deficits:

Well you know the weakness of the dollar is actually not part of the problem; it’s part of the solution. The dollar, unfortunately for Americans, has to get weaker, but for the rest of the world this is going to turn out to be a positive thing. You know Donald Trump has picked a fight that America can’t win because our entire economy has been built on the foundation of trade deficits and artificially low consumer prices, artificially low interest rates … So Americans on paper have been richer and their lives have been better because they’ve been able to live beyond their means; Americans could buy things that they really can’t afford that they didn’t produce and they pay for it with money that the Fed creates out of thin air.