Lear Capital Warns Dollar at 'Tipping Point' in New Report

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Sep 14, 2023, 09:04 ET

LOS ANGELES, Sept. 14, 2023 /PRNewswire/ -- Facing potential competition from five of the world's largest economies and a loss of confidence among some world leaders, the United States dollar may have reached a critical tipping point, according to a new report from Lear Capital. It's a situation partly driven by past decisions, such as abandoning the gold standard, as well as the current threat of an alternative world currency backed by Brazil, Russia, India, China, and South Africa.

These five countries, referred to as BRICS, represent 40% of the world's population. The idea of creating a global, gold-backed BRICS currency is gaining momentum in some nations. According to the new report, The Tipping Point, Americans can help protect themselves from the fallout of a potentially devalued dollar by balancing their portfolios with investments in precious metals.

The U.S. dollar became the world's dominant reserve currency after World War II, because it was backed by gold and the world had confidence in U.S. leadership. However, the U.S. took the dollar off the gold standard in 1971, creating fiat money backed solely by the word of political leaders.

"Fiat currency is a relatively new concept. On the other hand, precious metals have had a critical role in currency and finance for 8,000 years," said report author Rachel Mills, a Lear Capital global financial research specialist. "There is no logical reason to believe the world's patience and trust in the U.S. dollar will last indefinitely."

Another issue facing the dollar is eroding confidence in U.S. leadership among some world leaders. This includes the negative reaction from some quarters over the economic sanctions against Russia after the invasion of Ukraine. This step weaponized the dollar as an "enforcement mechanism in foreign policy," according to the report. That likely has increased support for an alternative currency.

Gold prices have trended upward for decades, especially during times of high inflation and economic uncertainty. In the near future, a gold-backed BRICS currency could drive those prices higher while weakening the dollar. If such a currency emerges, Americans could see price inflation, larger trade deficits, wage adjustment lag time, and an erosion of their savings.

Precious metals provide a store of value against these potential outcomes. Mills said metals such as gold and silver "can give people the opportunity to base their future on a time-tested approach to wealth preservation."

About Lear Capital
Founded in 1997 by precious metals expert, analyst, and The Bulls, the Bears, and the Bust author Kevin DeMeritt, Lear Capital offers investors the chance to diversify their portfolios with unique approaches to purchasing precious metals, including the Gold and Silver IRA. Employing a team dedicated to providing investors with real-time information and pricing on gold, silver, platinum, and palladium, Lear Capital is uniquely positioned to offer investors the convenience of online capabilities with the expertise and support of a brick-and-mortar institution. To date, the team has handled more than $3 billion in trusted transactions.

SOURCE Lear Capital