Last week, veteran economist Stephen Roach wrote in an op-ed for Bloomberg that a 35% decline in the dollar’s value against other major currencies may take place in the coming years.
Stephen Roach, a senior fellow at Yale University and former Morgan Stanley Asia chairman, has warned that the US dollar “is going to fall very, very sharply” in the not-so-distant future as the era of the American national currency apparently comes to an end.
All this is “going from bad to worse as we blow out the fiscal deficit in the years ahead”, the veteran economist pointed out.
As for the national savings rate, it will likely “go deeper into negative territory than it has ever done for the United States or any leading economy in economic history”, according to him.
In this vein, Roach argued that the dollar’s crash is virtually inevitable and may take place in the next few years.
The economist expressed concern that the possible collapse of the dollar may fuel a so-called stagflation crisis, when prices rise sharply while economic growth is muted.
The comments followed Roach arguing in an op-ed for Bloomberg last week that his forecast that “a 35% decline in the value of dollar could well be in the offing is couched in terms of the comparison between the US and the currencies of a broad basket of America’s trading partners”.
The op-ed comes as the greenback, which marked its 235th birthday on 6 June, remains the main global reserve currency, with more than 50 percent of the total gold and foreign exchange reserves stored in dollar assets.
Sourse: sputniknews.com
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