US dollar at risk of sudden collapse? Ex-IMF official warns ‘blow-up event’ could sink currency as debt mounts

South China Morning Post/Karen Yeung

Cartoon by Ed Stein of dollars flowing in an hour glass and investor caught in flow saying 'keep printing'With the United States expected to double down on its fiscal stimulus measures to mitigate the economic fallout from the coronavirus pandemic, and the US Federal Reserve continuing its aggressive monetary policy easing, there is a rising risk of a sudden loss of confidence in the US dollar, according to a former senior executive with the International Monetary Fund (IMF). Zhu Min, who was deputy managing director of the IMF from 2011 to 2016, said the US dollar’s position as the dominant global currency was at risk of being eroded because of mounting US government debt.”

USAGOLD note: This analysis falls in line with the United States being among the worse hit nation-states and the massive fiscal and monetary stimulus launched in response. Too, the Fed is supplying liquidity to the banking system globally – something other central banks are not burdened with. The currency markets assess value on a relative basis and the strain on the dollar is likely to be greater than that imposed on other major currencies. In what many will see as a preview of things to come, former Treasury Secretary Larry Summers warned recently that the “economy would be in grave danger if stimulus lapses.”


Repost from 7-27-2020

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