November 12, 2025
Peter recently Ed Siddell on The Retirement Trainer podcast to walk listeners through how capital flows, political promises, and central bank policy shape the dollar - and why none of it bodes well for the unprepared saver. He frames the dollar's past strength as a function of market performance and capital attraction, warns that recent fiscal choices have already undermined confidence, and reiterates his long-held case that gold will become the true safe asset as fiat rivalries crumble. He also reminds listeners that financial illusions - like digital money - can't replace real goods.
He opens by explaining why the dollar has looked strong lately, and why that strength is as much about flows into U.S. assets as it is about fundamentals:
Well, I think one of the reasons the dollar was strong is there was a lot of investment flows into the US. The US stock market had done much better than global markets. And so I think a lot of capital was attracted into our markets. And of course, you want to buy US stocks, you need US dollars. And also with the strength of the dollar, I think there was demand for US bonds, because with an appreciating currency, that meant that foreigners who bought US bonds, you know, had a gain on the foreign exchange.
Peter quickly shifts to politics, arguing that the illusion of a fiscal pivot has already been shattered and that recent promises have made deficits worse, not better. His point is that policy expectations matter for currency confidence, and that rising deficits can undo what short-term capital flows once supported:
I mean, I think it's already been triggered. I think a lot of it had to do with, you know, Trump and the big beautiful bill. I mean, that kind of burst any illusions or delusions that people might have had that Trump was going to be fiscally responsible and that Republican Congress was going to somehow reverse the excess spending of the Biden era. So that didn't happen. In fact, you know, the Trump budgets are going to be even bigger deficits than Biden.
From there he goes straight to what he thinks replaces an eroding fiat consensus: gold. He frames this not as a nostalgic preference but as a market-driven switch once the dollar's special status faces real stress - and he dismisses the idea that another fiat like the euro or yen could simply take its place:
I think that's already happening. And I think gold is going to be the replacement. And I've said this for some time because a lot of people have had a false sense of security with respect to the dollar status because they just didn't see any other fiat currency that could rival it. And I agree that it would make no sense to abandon the dollar as, you know, the reserve and just anoint the euro, you know, or the yen.
Peter also flags Federal Reserve policy and the playbook the Fed is likely to reuse. He points out that a pause in quantitative tightening (QT) is just a pause, and that the real risk is a return to quantitative easing (QE) once short-term rate cuts fail to bring down long-term yields - a dynamic that can reflate asset prices while leaving savers behind:
Well, I think, you know, they've just stopped quantitative tightening. And so the next step is resumption of quantitative easing. And I think what's going to be the catalyst for our return to QE is going to be the failure of the rate cuts to reduce long-term interest rates or mortgage rates. In fact, it's very likely that the next couple of rate cuts will result in rate hikes on the longer end of the curve.
Finally, he closes with a plain-language rebuke of the notion that digital promises can substitute for real wealth. Using a vivid analogy, he reminds listeners that a ledger entry or token can't feed a family or replace physical production - and that treating digital assets as equivalent to real goods is a dangerous mistake:
Look, I can, you know, create an image of a hamburger, and I can call it digital food. But I mean, I can eat it instead of an actual hamburger. It's not going to fill me up. I mean, if I have a diet of digital food, I'm going to starve to death.
This article was originally published on SchiffGold.com.