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The U.S. Congress recently approved the “Big, Beautiful Bill“, Donald Trump’s budget bill, hailed as a strong return of Republican economic policy. However, for Peter Schiff, this text marks a dramatic turning point. The economist sees it as a destructive mechanism preparing for the inevitable fall of the dollar and an unprecedented monetary shock.
In Brief
- Peter Schiff claims that the “Big, Beautiful Bill” will trigger a monetary spiral, threatening the stability of the dollar.
- Peter Schiff criticizes a disguised tax hike through inflation, financed by money printing and increasing the deficit.
- In the face of this inflationary trap, Peter Schiff suggests that Bitcoin could become a strategic reserve amid the collapse of the system.
The dollar between Fiscal Illusion and Monetary Crash
Presented as a tax reduction bill, the “Big, Beautiful Bill” actually relies on a public spending explosion. At a time when the fall of the dollar and bonds worries the markets, Peter Schiff dismantles this official discourse by pointing out a perverse effect: financing growing expenses through debt effectively taxes citizens via inflation. Especially since the money injected into the economy does not come from revenues but from money creation, thus fueling a spiral of dollar value loss.
Schiff describes this dynamic as a disguised tax increase, the impact of which spreads over time but affects all dollar holders. According to him, Trump’s budget logic relies on a monetary rush forward. This bill could trigger an economic collapse and wipe out the dollar. Moreover, the deficit Trump expects to worsen without constraint will be absorbed by the Federal Reserve through the purchase of public debt.
This dependence on monetization therefore implies a massive liquidity injection without real value creation. Expected result:
- Confidence in the dollar erodes;
- Foreign creditors withdraw;
- Interest rates soar.
The scenario of an uncontrolled devaluation and a recession fueled by capital flight.
An America “that prints to spend“, heading towards the dollar’s inflation trap
Peter Schiff emphasizes the lack of real counterpart in the text of the Big, Beautiful Bill. No credible spending cuts are included. Planned cuts in Medicaid, deferred for five years, are called hollow promises. For him, this delay shows that policymakers themselves do not believe in their own budget discipline.
He believes that the United States, by choosing to ignore fundamentals, enters an inflation trap:
- More debt;
- More money printing;
- Less confidence.
The system would then only hold by the illusion of stability. If this spiral confirms, states might turn to bitcoin as a safe asset and start to build a real strategic reserve against the dollar’s collapse.
Triumphalist Communication Facing an Ignored Systemic Risk
For its promoters, the “Big, Beautiful Bill” is a founding text of a new economic era. The White House highlights eight measures aimed at revitalizing small businesses, among others:
- Tax simplification;
- Support for domestic manufacturing;
- Increased R&D deductions;
- Targeted exemptions.
This narrative, illustrated by the infographic below, praises a prosperous future for the real economy.
But for Peter Schiff, these benefits mask a deleterious monetary mechanism. Behind growth promises, he sees the shadow of a budget imbalance. The dollar, on which this whole monetary architecture rests, risks not withstanding the shock. Often marginalized, Schiff keeps warning: the state dilutes the currency. The day the markets listen to him, it may be too late.
The “Big, Beautiful Bill” thus presents itself as a pro-growth reform. But, for Peter Schiff, it reveals a collective blindness to the limits of the American monetary system. The dollar, pillar of the global economy, rests on faith in the discipline of its issuer. And this faith, according to Schiff, is already wavering. An observation shared by Robert Kiyosaki, who states that bitcoin is the future, the dollar is a scam.
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The world is evolving and adaptation is the best weapon to survive in this undulating universe. Originally a crypto community manager, I am interested in anything that is directly or indirectly related to blockchain and its derivatives. To share my experience and promote a field that I am passionate about, nothing is better than writing informative and relaxed articles.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
