The expert named three reasons why the dollar will collapse by 35% by the end of the year

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The US domestic savings rate has dropped to its lowest level on record. Now economy countries have become even more dependent on foreign money, writes the expert of the American agency Bloomberg Stephen S. Roach.

2020 began with the growth of the American currency, but in March, due to the spread of the COVID-19 pandemic, the dollar began to fall. The dollar "lost" by 10-12% against the currencies of the main trading partners of the United States.



Observing the trends, in June 2020 it was predicted that the dollar quotes would collapse by 2021% by the end of 35. If confirmed, it will be an important signal for Joe Biden's first year in office. We are now at an intermediate stage.

There are three main reasons that lead to the depreciation of the dollar. The first is a sharp increase in the current account deficit in the US budget. The second is the growth of euro quotes. Third, the Fed does practically nothing, hoping for the “hand of the market”. With this in mind, the dollar appears to be even weaker than six months ago.

The current account deficit grew, as previously expected, in 2020Q 1,2 from 3,3 p.p. up to 2020 p.p. GDP, and in the III quarter of 0,1 by another 3,4 percentage points. up to 2008 p.p. This is the worst result since XNUMX.

As a result, the net indicator of the savings ratio (of business, citizens and government, taking into account depreciation) fell below zero for the first time in ten years in the second and third quarters. There was a decrease by 3,8 percentage points. domestic savings ratio, it became -0,9%. Moreover, in the first quarter it was + 2,9%. This has never happened before.

This happened thanks to a package of anti-coronavirus measures in the amount of $ 2,2 trillion. Another similar program is planned for $ 2,8 trillion ($ 0,9 trillion has already become law, and $ 1,9 trillion is awaiting presidential approval). The total volume of anti-coronavirus measures will be $ 5 trillion, or 24% of US GDP in 2020.

In this case, the US Federal Reserve behaves as if nothing is happening. The Federal Reserve is not going to solve the issue of the current payments deficit and tighten the monetary policies... The American economy is on the brink of a recession and the pandemic continues. Therefore, a stimulating financial "injection" will be approved, and perhaps more than one. But this will have consequences. The US is really short on savings and that will weaken the dollar.
  • https://pixabay.com/
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11 comments
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  1. Miffer
    Miffer
    +2
    26 January 2021 19: 15
    ... in June 2020, a forecast was made that by the end of 2021, dollar quotes would collapse by 35%. If it is confirmed ...

    Now, if it is confirmed, then we'll talk.
    1. Miffer
      Miffer
      0
      28 January 2021 08: 44
      Stepanova believes that in the event of a short-term fall in the dollar exchange rate, a default in the United States or an unexpected monetary or administrative reform in America, the ruble exchange rate will fall sharply along with the exchange rates of other developing countries. At the same time, the quotes of the reserve currencies (euro, Swiss franc, pound sterling, yen) will skyrocket, and the currencies of developed countries - the Norwegian, Danish and Swedish kronor, Canadian, Singaporean and Australian dollars will also rise. In addition, the demand for precious metals, real estate and business will grow.

      Homegrown couch patriots must learn this quote by heart, realize and try to forget their stupid fantasies: if $$$ grunted, then the ruble would grun 76 times stronger, turning into dust, and Russia would switch to natural exchange, as in the years of the civil war a century ago.
  2. 123
    123
    0
    26 January 2021 19: 54
    The expert named three reasons why the dollar will collapse by 35% by the end of the year

    We need to clarify in relation to what it will collapse. If against the ruble, then I doubt the government and the central bank will restrain the growth of the ruble. Its strengthening is not beneficial to them, at least at the moment. And now "the captains of the obvious" will run in and start - you look at the course, see what happens by the end of the year, and so on.
    That the dollar will depreciate is almost a fait accompli, in the sense of the probability is very high, but against this background we will hardly notice the strengthening of the ruble. Rather, it will go down around the dollar level.
  3. Vladest
    Vladest
    -3
    26 January 2021 19: 56
    This "expert" must be the richest man on Earth if his predictions are so accurate.
    In reality, collect a dozen of them and they will pull out each other's hair in arguments, whose forecast is true.
    The main thing is, let it get cheaper. The United States once experienced the Great Depression. It was real.
  4. zloybond
    zloybond
    +1
    26 January 2021 20: 02
    Dolar himself is aware that he will collapse ??? Or we mean the ruble, but we say dolar ????
  5. Sergey Latyshev
    Sergey Latyshev
    0
    26 January 2021 20: 09
    The old song about the dollar ... Meanwhile, in 2019-20, investments in American stock funds were one of the most profitable in Russian banks
    1. 123
      123
      -1
      27 January 2021 02: 00
      Meanwhile, in 2019-20, investments in American stock funds were among the most profitable in Russian banks.

      To say that the "most prestigious" fellow in my opinion an exaggeration. What is the relation of company shares to the exchange rate is not clear request

      The highest ruble yield in 2019 was shown by Russian long-term Eurobonds and federal loan bonds (OFZ), shares of Russian companies, including Surgutneftegaz and Gazprom, and from precious metals

      https://www.rbc.ru/finances/30/12/2019/5e02098b9a7947f08cbd142f

      The highest returns in 2020 could have been received by investors who invested in shares of Russian and American companies from the technology sector, as well as in gold,

      https://www.rbc.ru/finances/30/12/2020/5fe343cf9a794782ea1e0f3c
  6. Peter rybak
    Peter rybak
    0
    27 January 2021 00: 42
    Well, it will collapse, what does it matter to us? Will gasoline become cheaper or food?
  7. gorenina91
    gorenina91
    -1
    27 January 2021 12: 12
    The expert named three reasons why the dollar will collapse by 35% by the end of the year

    - It seems that yes ... - this is quite possible ...
    - But it may be (most likely) an artificial collapse ... - Why should the Americans themselves be especially afraid of this collapse ... -they will remain stewed in their own juice ... - But Europe, which breaks in (and will soon climb even stronger ) into the American economy ... - it will suffer great ... - And Britain, with its "neyesov pound", will remain on the sidelines ... - But Russia will fly absolutely "in full" .... - And the American "papers", in which "Russian dollars" are invested - they will immediately fall in price several times (and they will not be taken back "for cheap") and investors; who were going to invest in Russia; those. agreements and transactions with them have already been concluded ... - they will invest already devalued dollars in Russia and acquire Russian assets for the "same amount" that has already been agreed and indicated in the concluded contracts ... - So Russia will have to get its Russian gold and again trying to save the American dollar ... - In 2020, Russia is already very much and very ruinous for the Russian economy ... - put up its gold for sale ... and sold it at a great loss for itself ...
    - And today only the worst can be expected from the American Democrats ...
  8. stepset
    stepset
    -8
    27 January 2021 13: 41
    The expert named three reasons why the dollar will collapse by 35% by the end of the year

    We know, we know.
    I have heard about the decay and collapse of the United States since the time of Brezhnev.
    Already the USSR is 30 years old, as not.
    And the United States is all preparing to collapse. They just won't get ready.
  9. alex5450
    alex5450
    -1
    28 January 2021 17: 41
    The main thing is that the ruble is falling faster than the dollar.