EDITOR NOTE: Is it conceivable that in 15 years, the US dollar will lose its world reserve currency status? It’s a frightening prospect, but that’s what investing magnate Stanley Druckenmiller is forecasting based on the government’s and central bank’s current course. At the center of the issue is this: the “emergency” phase of the Covid pandemic has ended. To prevent the economy from cratering with a magnitude equal to that of major depression, the Federal Reserve needed to print money to fund the government’s fiscal efforts to restart the economy. As a consequence, the Fed printed equivalent to around 20% of all dollars in existence in 2020 alone, while the government spent around 4 trillion in 2020 alone. Yet, the Fed and the government not only are still going at it, but they’re also expanding the “emergency” printing and spending long after the emergency has ended. So, essentially, the Fed is just underwriting Congress’ “takeover” of American funds for its own political agenda. And for this--the effect it will have on our economy--we risk losing the dollar’s reserve status. And once it's dethroned, the impact it will have on your hard-earned wealth will be nothing short of devastating, which is why the smartest investors are going bold on gold.
Michelle Makori and Danielle Di Martino Booth discuss the impact of the Federal Reserve's monetary policy and the Biden administration's fiscal policies on the economy and the long term status of the dollar, in light of recent remarks by Stanley Druckenmiller.
Even in light of a clearly recovering economy, and new COVID cases on the decline, the government continues to inject liquidity into the financial system through fiscal and monetary stimulus, with the end result being the devaluation of the dollar and losing its global reserve currency status to China, said Danielle DiMartino Booth, CEO of Quill Intelligence. “We are no longer in an emergency situation.
If the Fed is going to insist on being an ostrich and sticking its head in the sand, while it's pumping out $120 billion per month of quantitative easing as if we were in a depression, then yes, I see every reason for China to continue playing its very game with with the intention of eventually unseating the U.S. dollar,” DiMartino booth told Michelle Makori, editor-in-chief of Kitco News.
Originally posted on Kitco News