On CNBC’s “Trading Nation” yesterday, Stephen Roach, a Yale University senior fellow and former Morgan Stanley Asia chairman pointed out what should be common investor knowledge, like every fiat currency on the planet, the dollar is doomed, but in the short term, it’s in for a steep decline in value. Roach suggests it could be a 35% drop against major rivals and very soon, as well, due to the nation’s deficit and dwindling savings. He suggests further weakness is provided by China’s rise and the U.S. decoupling from its trade partners.
“The dollar is going to fall very, very sharply,” he told the business network. His comments on CNBC doubled down on what he had written in a Bloomberg op-ed the previous week, where he specifically stated that the “era of the U.S. dollar’s ‘exorbitant privilege’ as the world’s primary reserve currency is coming to an end.” He pointed to the COVID-19 pandemic and the havoc it wreaked on the U.S. dollar and workers, suggesting even greater financial woes coming and noting that the “world is having serious doubts about the once widely accepted presumption of American exceptionalism.” As the government continues to spend trillions attempting to mitigate the pandemic, the potential for recession and inflation grows quickly and immensely.
The Top 10% bailed from the market at the start of the March collapse, they bought back into the market when it bottomed out, and “mom and pop” investors have come running into that burning building since. Many are getting a false sense of security from the new “commission-free” market. But there is no legitimate reason for the market to be rising, other than the fact that bonds, annuities, and typical investment tools just aren’t performing, nothing is in place to change that and there are no obvious available options.
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