American investor, CEO and Chief Economist of Euro Pacific Capital Peter Schiff wrote last night (April 20th evening, Beijing time): "Trump said that China needs American consumers. America has 340 million consumers with an average annual income of $44,000 per person. This is far higher than the income of most consumers outside the United States, but this is entirely due to exchange rates.

China has 1.4 billion consumers with an average annual income of $13,000. But if the RMB/USD exchange rate doubles, these 1.4 billion people will immediately earn $26,000 annually. Although this is still below the US per capita income, due to China's population being 1 billion more than the US, an additional income of $13,000 for Chinese consumers equals 20% of total US income. If the income of 1.4 billion Chinese consumers doubles, they will be able to easily purchase goods that Americans cannot currently afford.

Similarly, just the EU alone has 450 million European consumers with an average annual income of $35,000. If the euro and seven other EU currencies appreciate by 50% against the USD, these 450 million people will have an additional income of $17,500 annually, which exceeds 50% of the total purchasing power of 340 million Americans.

The key point is that the purchasing power of American consumers depends purely on exchange rates. If countries around the world abandon the dollar as a reserve currency, sell off their dollar debt, and instead buy other sovereign debt or gold, the purchasing power lost by Americans will be transferred to other parts of the world. Farewell, American consumers; hello, non-American consumers."

[Smart] Additional information: Peter Schiff's views among Wall Street bankers and investors are in the minority. Due to his accurate prediction of the 2008 financial crisis, Peter Schiff, President of Euro Pacific Capital, became a star public figure. He frequently appears on financial debate programs on CNBC, FOX, CNN, and regularly publishes comments in renowned media such as The Wall Street Journal, Financial Times, and The New York Times.

Original article: https://www.toutiao.com/article/1829970034777091/

Disclaimer: The article solely represents the author's personal viewpoint.