Are Investors Prepared For The Dollar's Potential Crash?

The Federal Reserve's ongoing battle with inflation is leading to a loss of faith in the U.S. dollar.

Despite hikes in the Federal Interest Rate since March 2022, inflation, as measured by the Consumer Price Index (CPI), has only dropped to 6% from 8.5%. The current 6% figure is three times as high as the Fed's target interest rate of 2%, a level it seems will take a while to achieve. 

Admittedly, the Fed has had to deal with "unexpected" consequences of their aggressive monetary tightening policies. The notorious downfall of Silicon Valley Bank, for example, can be attributed in large part to the Fed's aggressive interest rate hikes. Due to the bank's overleveraged positions in bonds, whose prices are inversely related to the Federal interest rate, the Fed's rate hikes depleted SVB's assets to unsustainable levels and led to a bank run. 

The depositors at the bank and SVB creditors were only made whole through the joint intervention of the Treasury, Federal Reserve and the Federal Deposit Insurance Corporation. Still, the Federal Reserve now faces a problem. On one hand, it needs to continue to increase the Federal Interest Rate in order to combat inflation, but an overly aggressive stance could trigger further unexpected collapses in the financial ecosystem. 

Money Migrates From “Risky” To “Safe” Assets

The instability stemming from SVB's collapse and the Fed's inability to curb inflation has led to concerns over the future value of the U.S. dollar. The general migration of money from risky to "safe" assets has exemplified these worries on the price charts of precious metals like gold, silver and palladium; each metal has experienced a surge in its prices in 2023. 

According to Peter Schiff, CEO and chief economist at Euro Pacific Capital, the value of gold could continue to increase if investors continue to lose faith in the U.S. dollar and the Fed's ability to curb inflation. The cautious are putting their money into precious metals to ensure that, in the worst-case scenario, their hard-earned cash is safe. 

Stay Safe: Invest In Precious Metals With Lear Capital

For these cautious individuals, Lear Capital is a reputable and reliable resource to diversify portfolios by investing in precious metals such as gold, silver, platinum, and palladium. With over 25 years of experience in the industry, Lear Capital offers a variety of options for investors to purchase gold and silver bullion bars or coins or add physical gold and silver to their existing IRA or 401k retirement accounts.

When working with Lear Capital, investors will receive the personal attention of a dedicated account representative who will guide them through the investment process, including providing access to a secure ordering environment and keeping them informed of spot pricing, precious metals news and economic events that could impact their retirement and future.

Lear Capital's commitment to customer satisfaction is evident through its industry-leading Price Advantage Guarantee, which ensures that customers always receive the best possible prices. Additionally, the company has earned a AAA rating with the Business Consumer Alliance, reflecting its reputation as a trusted and reliable resource for precious metal investment.

Investing in precious metals can be an effective strategy for protecting retirement funds and diversifying investment portfolios. With Lear Capital, investors can rest assured that they are working with a reputable and experienced partner in their pursuit of financial security. 

Click here to learn more about Lear Capital and asset protection. 

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