fountains gold Peterhof state museum
© Sputnik / Ruslan Shamukov
Fountains of the Grand Cascade at Peterhof State Museum Reserve, St. Petersburg
The global gold fever, led by Russia which is diversifying its foreign exchange reserves, is the right thing to do as the US dollar's value is being diminished, CEO of Euro Pacific Capital Peter Schiff told RT.

The greenback's role as a reserve currency is going to be questioned soon, according to Schiff.

"I think what Russia is doing or other central banks are recognizing is that they need to increase their gold reserves because of the impending dollar crisis. Ever since the US led the world off the gold standard, the world has been on a dollar standard. That was fine when the dollar was backed by gold but now the dollar is backed by nothing..." said Schiff.

"Up until now that hasn't been a problem because people have still perceived the value of the dollar but I think that's going to change," he added.

Russia obviously wants to buy as much gold as it can while the price is still relatively cheap, Schiff said, adding: "That allows it to build up a bigger hoard of gold to replace the diminished value that the dollar is going to play as a reserve currency.

The next recession of the US economy will occur when "the Fed goes back to zero and we launch QE4," according to the expert. "The dollar's role as a reserve currency will be questioned then," Schiff said, noting that the central banks will need an alternative. "The only viable alternative to back up their currencies is real money which is gold."

While other countries back their currencies with dollars, the US can't do the same, and the problem is that "we [the United States - Ed.] don't have enough gold relative to all the currency that we've been creating and are going to be creating."

Schiff suggested that no country likes that the "US uses the dollar as a weapon." So, to move away from the greenback they increase their gold reserves now while "gold is still cheap because when the dollar really starts to tank the price of gold will soar."

With its actions Washington is pushing countries toward accumulating gold, Schiff said, explaining that this is in fact what the US is "doing now with China with this trade war."