“U.S. living standards are about to be squeezed as never before.”
Oh, great! Exploding federal budget deficits are catching up with us. The chickens are coming home to roost and a crash in the dollar is headed our way.
That’s according to a piece on Bloomberg News the other day, A Crash in the Dollar Is Coming. It’s by Stephen Roach, an economist at Yale University now, before that with Morgan Stanley, and with the Fed.
We have followed Roach for a long time. He writes a lot and is a pretty sensible guy.
Roach says, “The seeds of this problem were sown by a profound shortfall in domestic U.S. savings that was glaringly apparent before the pandemic.”
Unemployed and panicked American’s quit spending with the onset of the pandemic, so the US savings rate did turn up sharply. But it hasn’t been enough to offset the exploding federal deficit.
The coming dollar downturn will be inflationary, according to Roach. Couple that with the slowdown effect of the pandemic measures, and you have the worst of two worlds: stagflation. Rising prices and little or no economic growth.
And that’s not all. According to Roach, the growing trade war will mean that much of what Americans buy will be diverted from low-cost to higher-cost producers. That’s another tax on consumers. And who will fund our deficits, buy US Treasury securities? Take China out of that picture as well. Fewer buyers mean higher interest rates.
Oh, great. But as Roach says, the privilege we’ve had with the dollar shouldn’t have been taken for granted. And now a collapse of the dollar is headed our way.
Oh, well. But what can you do?
There is something you can do instead of sitting around muttering “oh, great,” and bemoaning the inevitable. Take the vital steps needed to protect yourself and profit with gold and silver.
You can do that!
To get started actually doing something, call and speak with a Republic Monetary Exchange precious metals specialist today.