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MarketWatch/Shawn Langlois/12-26-2020
“‘[A] 25% reduction in our standard of living’ could take place if the dollar loses its reserve status, which he says is a very real possibility. ‘Unlimited debt and irresponsible activity don’t lead to positive outcomes,” the billionaire real-estate mogul added. ‘That’s a disastrous kind of scenario.’”
USAGOLD note: Coincident with Zell’s warning, the IMF, according to a Reuters article, reports that the dollar’s share of global reserves dropped from 61.2% to 60.4% in the third quarter – its second straight quarterly decline. The drop is not an earthquake by most standards but indicates the trend about which Zell and a good many prominent money managers and economists have warned over the past year. Zell sees the dollar’s demise as ten to fifteen years away. Still, we should keep in mind that even if the process is gradual (as most foresee), it is likely to have a pronounced psychological impact in the investment arena that logically would accrue to gold’s benefit. In early 2019, Zell announced that he had purchased gold for the first time because “it is a good hedge.”
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