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Renowned economist Jim Rickards explained that buying gold to back the dollar would restore confidence in the currency, avoiding a long-term decline. He stated that the currency should not be taken for granted, as new forms of money like crypto will step in as old money fails.
Jim Rickards: Treasury Should Buy Gold to Avoid Dollar Substitution by New Forms of Money Like Crypto
The longevity and staying power of the U.S. dollar is starting to worry economists in a high-debt, high issuance scenario. Jim Rickards, renowned economist and best-selling author, highlighted the role that gold might play in helping the greenback maintain its current world currency status.
In a recent interview, Rickards explained that the U.S. Treasury should start buying gold to avoid a long-term currency decline as central banks rush to gold and shed dollar reserves.
He stated:
The Treasury buying gold would restore confidence in the dollar and perhaps make people believe again that the currency has real value.
However, this would also increase gold’s price in dollars, but Rickards assesses that the advantages would far outweigh the downsides of such a move. “The price of gold in dollars would clearly go up, but buying gold would be a statement to the world that we are not just going to go down the print-the-dollar rabbit hole,” he stresses.
Rickards explains that this doesn’t mean the U.S. should return to the gold standard, but it would send a message showing the country retains the intention of honoring its obligations.
Furthermore, when talking about the possible substitution of the dollar, Rickards detailed that when old money fails, new forms of money will rise, highlighting the case of crypto. “Humans are incredibly adaptable when it comes to money. Witness crypto as a case in point,” he concluded.
In May, Rickards forecasted gold prices to go over $27,000 by 2026, fundamenting this prediction in a rush to gold by central banks amidst a global fiat debase scenario.
What do you think about Jim Rickard’s statements on the U.S. dollar and gold? Tell us in the comments section below.