CNBC: A dollar crash is virtually inevitable, Asia expert Stephen Roach warns
The stronger dollar era may be on borrowed time.
Stephen Roach, one of the world’s leading authorities on Asia, is worried a changing global landscape paired with a massive U.S. budget deficit will spark a dollar crash.
“The U.S. economy has been afflicted with some significant macro imbalances for a long time, namely a very low domestic savings rate and a chronic current account deficit,” the former Morgan Stanley Asia chairman told CNBC’s “Trading Nation” on Monday. “The dollar is going to fall very, very sharply.”
His forecast calls for a 35% drop against other major currencies.
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WNU Editor: I recall President Trump talking about the debt levels that needs to be reached before this becomes a serious problem. I cannot find a link to his remarks, but he basically said that when the Federal debt reaches $30 trillion and the economy is not growing .... the U.S. dollar status as a reserve currency will be under strain. He gave a prediction that this will need to be solved by 2030. Unfortunately .... the pandemic has changed everything, and the problem is now. This is why Stephen Roach is predicting a crash if nothing is done to charge up the economy and make it grow at levels that can sustain this debt exposure.
5 comments:
"According to Roach, not even a leadership change in Washington in November would be able to move the needle much — especially as lawmakers try to battle the economic impact from the coronavirus crisis with unprecedented stimulus measures."
As usual it all comes to politics. We can all be assured that a "leadership change in Washington in November" will not improve the situation.
The Dems are aware of the financial damage this will cause the country. And they will push for higher levels of borrowing (i.e: stimulus) in order to do the exact damage that Roach describes - in order to hurt Trump. Couching it in terms of public need for more bailout funds. /For the American people, right?
Trump has to resist these stimulus policies and every other insane push by the Democrats. The US has a political party determined to destroy the nation in order to scuttle his reelection.
The likes of the economic best and the brightest, namely Krugman, Bernanke, Greenspan and the current guy worry me. They are serial market interest rate manipulators. They haven't the sense to put on their asbestos gloves as they play with financial fire.
I'm not convinced they could pass the soup test. If it were raining soup from the sky would they walk out their door with a spoon in their hand or a knife?
the buck is where? It is June 2020
We should forgive some of our Chinese debt! LOL, but will never happen as this would start a war.
Maybe 12:18 PM could explain to us how Trump is solely responsible for this mess. I'd love to hear that logic.
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