Schiff Urges China to Crash Dollar and Back Yuan with Gold

Schiff: Dump U.S. Debt and Empower Chinese Consumers

Schiff has renewed his call for China to take drastic measures amid the escalating trade war with the United States. According to the economist and gold advocate, the most effective strategy would be for China to dump its vast holdings of U.S. Treasuries and dollar reserves. In his view, the proceeds should be used to buy massive amounts of gold—laying the groundwork for a revaluation of the yuan backed by precious metal reserves.

Schiff argues this move would not only weaken the U.S. dollar but also cause interest rates to spike dramatically. The economic shockwaves would primarily hit the United States, while Chinese consumers would see their purchasing power surge. In a post on X (formerly Twitter), Schiff emphasized that Chinese citizens would then be able to afford both domestic goods and American-made products, including second-hand vehicles and consumer goods that many U.S. households might no longer afford.

Gold as a Weapon in the Trade War

This suggestion from Schiff comes as tensions between the world’s two largest economies continue to rise. After the Trump administration imposed reciprocal tariffs on over 180 countries, China retaliated with a sweeping 34% tariff on all U.S. imports. Schiff contends that using gold to back the yuan would insulate China from further economic fallout and shift the burden to American consumers.

Navarro Downplays Fallout, Critics Sound Alarm

Despite growing concerns, Trump’s trade adviser Peter Navarro dismissed global stock market declines as “a beautiful situation,” claiming the VAT systems used by U.S. trade partners are equivalent to tariffs. Schiff disagrees, noting that VAT applies broadly and does not unfairly target imports. Meanwhile, investor Bill Ackman warned of a “self-induced economic nuclear winter” if current U.S. policies persists.

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