On CNBC's Futures Now, Peter Schiff shared his take on the Chinese devaluation of the yuan and how it affected the price of gold. Once again, Peter reminded us that gold may not have moved up very much in terms of the US dollar, but in the Chinese currency the yellow metal rose significantly.

While the world still believes the US dollar is the strongest currency amidst an international currency war, Peter warns that the yuan devaluation is just temporary. Eventually, the Federal Reserve will start a new round of quantitative easing, and the United States will “win” the war by pricking the dollar bubble and destroying the value of its currency.

(Video length 00:05:56)

Highlights from the interview:

“[Gold] is moving up a lot in terms of the Chinese yuan, because they devalued yuan. Gold is up in terms of the dollar today, so it's up even more in terms of yuan. The reason it's not making a bigger dollar move is because China's devaluation is also impacting other currencies, particularly commodity-linked currencies. Look at the Australian dollar. Look at the Canadian dollar. Gold is making a huge move in those currencies as well. But I don't think this is the beginning of future devaluations. This is a small move. Remember, the Chinese yuan has gained tremendously in value along with the dollar against a number of currencies. So the Chinese are reacting to weakness in other currencies. it's not really a dollar story. I do believe the dollar is in a bubble, and when this bubble bursts, I think you're going to see a substantial revaluation upward of the yuan against the US dollar ultimately…

“I don't think it matters at all [what the Fed will or won't do]. I've been saying that the Fed has been bluffing about its ability to raise interest rates all along. I think the Fed appreciates that this is a gigantic bubble, and any significant rate hike would prick it. In fact, even a quarter of a point rate hike might be a big enough pin to prick this bubble. Which is why all the Fed does is talk about raising rates… In fact, I think if the Fed does raise rates whether in September or December, the next move after that is going to be to move them back down to zero in preparation for QE4, because this economy will be in recession if the Fed raises rates. And it will be in recession even if they don't raise rates…