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(Kitco News) - Western sanctions against Russia weaponized the dollar and caused distrust of the world's reserve currency, which ultimately is good for gold, said Matthew Piepenburg, partner at Matterhorn Asset Management.
In mid-July Kitco Mining spoke to Piepenburg at the Rule Symposium Natural Resource Investing 2023 show held in Boca Raton, Florida.
"When you take a country like Russia and you freeze its access to FX reserves, you take it off the SWIFT currency system, even SDR access, these things are going to raise eyebrows for other countries," Piepenburg told Kitco correspondent Paul Harris.
He added that the stronger dollar and higher interest rates are particularly stressful for developing countries, which hold $14 trillion worth of dollar-denominated debt.
"Those two forces of a strong, long-interest-rate-driven dollar and a weaponized, politicized dollar have really caused a ripple effect of distrust for the world reserve currency."
While Piepenburg says it's not the end of the dollar nor of fiat currencies,"the trend is clearly a de-dollarization…. once you weaponize that reserve currency as I said then, the genie never goes back in the bottle."
Asked what will build investor interest in gold, Piepenburg said it's when the reduced purchasing power of the US dollar becomes obvious."They need an anti-fiat antidote to weak money."
Kitco Mining's coverage of the Rule Symposium Natural Resource Investing 2023 was sponsored by G Mining Ventures.