The end of the dollar’s exorbitant privilege

Financial Times/Stephen Roach

Graphic image of George Washington as he appears on the one dollar bill“A crash in the dollar is likely and it could fall by as much as 35 percent by the end of 2021. The reason: a lethal interplay between a collapse in domestic saving and a gaping current account deficit.”

USAGOLD note: This tightly written analysis from Yale economics professor Stephen Roach deserves a careful reading. It exposes the core problems with the dollar and how it will effect its competitors including gold. The greenback’s safe-haven status (and related demand) relies heavily on the exorbitant privilege Roach says is about to end. (Please see post directly above.)  A 35% decline in the value of the dollar would not be something to take lightly.

Repost from 10-7-2020

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