A former Morgan Stanley chairman thinks the dollar will crash at least 35%, which could ultimately benefit bitcoin and other cryptoassets.
Stephen Roach, former chairman of Morgan Stanley Asia, appeared on CNBC’s Trading Nation program to discuss the global economic landscape in response to the COVID-19 pandemic. Roach warned investors over a potential dollar crash and said the world’s reserve currency failing would mark the end of an era.
The US 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. But these problems are going from bad to worse as we blow out the fiscal deficit in the years ahead.
Roach also published an op-ed with Bloomberg on June 14, predicting the dollar would fall 35 percent.
My 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 U.S. and the currencies of a broad basket of America’s trading partners.
Roach continued saying haven plays into the dollar over the next two years would reinforce the “negative case” for the failing currency. He also argued cryptocurrencies and gold “should benefit from dollar weakness,” despite both industries being relatively too small to absorb major adjustments in the world’s foreign-exchange markets, which post $6.6 trillion in daily turnover.
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