For decades, the U.S. dollar has held the esteemed position as the world's primary reserve currency. But according to Lynette Zang, chief market analyst for ITM Trading, this longstanding dominance is on shaky ground.
"The days of the dollar being the world reserve currency are fast coming to a close," she said in a recent interview with Stansberry Research.
Zang explained that the shift began back in 2002 when the Federal Reserve "first had to buy" U.S. debt. This act suggested that the world was either "saturated in it" or unwilling to buy "enough of the U.S. debt that we were trying to shove down everybody's throat."
Many experts have been concerned about America's escalating debt. Fitch Ratings recently downgraded the United States’ long-term foreign-currency issuer default rating from its highest AAA rating to AA+. The credit rating agency pointed to “expected fiscal deterioration over the next three years,” a “high and growing general government debt burden” and an “erosion of governance” as reasons behind the decision.
But the dollar's status isn't Zang's only concern.
‘A House Of Lies'
In March, the collapse of Silicon Valley Bank grabbed major headlines. After the bank sold its Treasury bond portfolio, it incurred a substantial loss, causing depositors to question its liquidity and leading to a bank run. Amid this market upheaval, Silvergate Bank, First Republic Bank and Signature Bank failed as well.
Even though bank failures now seem like old news, Zang believes the crisis lingers on.
"This banking crisis is not over," she said. "Maybe they’ve been able to paper over it, and so everybody is calm, and you have consumer confidence going up and all of this other kind of garbage. But it’s built on a house of lies."
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Zang then pointed to U.S. Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell.
She didn't hold back when discussing these prominent figures: "That’s what Yellen's job is, and that’s what Powell's job is… Their job is to keep the public calm and keep them inside of the system — because it is easier to steal wealth that way."
If you're seeking ways to shield yourself from this turmoil, it's worth noting that Zang has long championed gold as a protective hedge.
The gold market hasn't seen any explosive moves lately. When asked what her message was for those on the sidelines, Zang’s response was unequivocal.
"I’m saying you take advantage of it and get everything in place, because we are inside of a major hurricane. There’s no doubt about it," she said. "It isn’t just the death of the dollar. It’s the death of the entire financial, monetary and social system."
Furthermore, many countries are developing central bank digital currencies (CBDCs). Zang warned that with the introduction of CBDCs, there could be restrictions around buying gold.
"Because what gold does, is it competes with dollars, or euros or yen or anything else, so it would be competition to the CBDCs," she explained.
The Golden Buffer
Gold has served as a store of value for thousands of years.
Unlike fiat money, which can be produced in unlimited quantities, the precious metal has inherent scarcity, making it a hedge against inflation.
At the same time, gold has historically been recognized as a safe-haven asset, providing investors with a hedge against economic uncertainty and geopolitical risks. In times of political unrest, wars and other crises, the yellow metal has often been sought as a refuge, given its global recognition and value.
If you share Zang's view, you can invest in gold by purchasing coins and bars from your local bullion shop or even explore opening a gold IRA. You can also access the metal through exchange-traded funds (ETFs) like the SPDR Gold Shares (GLD). Stocks of gold mining companies provide another way to gain exposure to the sector.
While gold doesn’t offer a yield, new companies have innovated ways for investors to earn passive income from inflation-resistant assets. Here’s how to invest in rental properties with as little as $100 while remaining completely hands-off.
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