KEY POINTS
- Stephen Roach: Dollar will slide 35% against other currencies in near future
- Says Fed Reserve’s fiscal stimulus package will greatly increase deficit
- Believes that China’s currency will strengthen going forward
- U.S. dollar will weaken “sooner rather than later”
The U.S. dollar, which functions as the world’s reserve currency, is going to implode at “warp speed” amid a shift in the global economic landscape and a massive U.S. budget deficit, a renowned American economist has warned.
Stephen Roach, who the CNBC described as one of the world’s leading authorities on Asia, made the dire prediction that the U.S. dollar will decline sharply by 35% against other currencies in the near future.
“I do think it’s something that happens sooner rather than later,” he told MarketWatch on Monday (June 22). It is a warning he has been sounding for weeks.
Speaking on CNBC’s ‘Trading Nation’ on Monday, Roach said, “The dollar is going to fall very, very sharply.” He cited a number of reasons for the weakening of the greenback. These include the U.S. economy’s lockdown-induced recession — triggered by the coronavirus pandemic, the disassociation of the U.S. from its trade partners, China’s increasing importance in the global economy and high U.S. unemployment figures. Since February, the unemployment rate in the United States has increased by 9.8 percentage points and the number of unemployed persons by 15.2 million.
Source: Aartie Rau | International Business Time
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