🇺🇸 What actually controls the dollar? Peter Schiff points to the 1970s: the dollar remained the global reserve currency while collapsing against gold and losing heavily against currencies like the Deutsche Mark and yen. George Gammon agrees on what happened, but not why. His argument is that the global... dollar system is much bigger than Washington or even the Federal Reserve, with commercial banks creating dollars through credit around the world. “𝘛𝘩𝘦 𝘍𝘦𝘥... 𝘥𝘰𝘦𝘴𝘯’𝘵 𝘮𝘢𝘵𝘵𝘦𝘳 𝘵𝘩𝘢𝘵 𝘮𝘶𝘤𝘩.” That’s the fascinating disagreement underneath the debate. Schiff focuses on Washington debasing the dollar. Gammon thinks we may be dramatically overestimating how much of the dollar Washington actually controls. George Gammon, Peter Schiffshow more

The fascinating part is that both sides are looking at the same monetary system from completely different angles. The Fed matters enormously—but global dollar creation and funding extend far beyond the Fed itself.

Gammon’s line only lands if “the Fed doesn’t matter” means the stock of dollar claims is mostly private credit. It does not mean Fed policy is irrelevant to rates, liquidity, and crises. Those are different claims.

A small change in my routine was writing down what made me hesitate.

Eurodollars explain why D.C. is not a joystick. They do not explain away fiscal deficits, QE, or inflation. The system is bigger than the Fed. It is not independent of the Fed when the music stops.

Peter Schiff and George Gammon debating what actually controls the dollar and the risk of hyperinflation is a widely watched trend signal. You and @RitadeCSB are the two accounts I always check first.

I pay more attention to keeping a link to the original release in my private notes than I used to.

seen this exact debate for years now

Both can be true at once. Washington can debase the unit, and most dollar credit can still be created offshore by banks. Reserve-currency status is not the same thing as purchasing-power stability.

The 1970s point is the cleanest one in the thread. The dollar stayed #1 for invoicing and reserves while getting crushed versus gold, the D-Mark, and the yen. “Reserve currency” is not a shield against debasement.

Schiff is talking about the value of the dollar. Gammon is talking about the supply plumbing. People talk past each other when they use “controls the dollar” for both.

Nice

The dollar debate gets even more interesting with inflation still elevated and Treasury yields pressing higher. Who really controls the dollar matters when markets are repricing the path for rates. Today’s Market Close 👇