Raw materials in this article
Forex in this article
?? Jeffrey Gundlach sees the dollar losing its reserve currency status
?? US economic policy is responsible for the dollar’s weakness in the future
?? The United States lags behind China
Bond expert Jeffrey Gundlach spoke in an interview with Yahoo Finance about sharp criticism of current economic policy in the United States. He accuses the government of not appreciating the dollar’s status as a reserve currency.
Gundlach expects the US dollar to depreciate
Gundlach, who founded the investment firm DoubleLine Capital and is CEO there, has been warning for years that the US dollar is likely to lose its status as the global reserve currency. “My deepest conviction is that in a few years – and I’m not talking about the next few months but over several years – the US dollar will fall,” the expert said in an interview.
He also blames US economic policy for that. “We are running our economy in such a way that we are not interested in maintaining the position of the world’s reserve currency, the greatest army or – as the world calls it – supremacy or control,” Gundlach warned. Gundlach explains that as long as politics continues in this way, the United States will lose its unique position as a reserve currency.
Criticism of disrespecting the pre-liquidation status
The government in past decades has taken the US dollar’s status as a reserve currency for granted, but has not given it enough credit. After all, there has been no serious economic program since the 1980s, he criticizes.
He also explained in an interview how the United States is losing touch with China in terms of economic growth. After global lockdowns and restrictions as a result of the COVID 19 pandemic, the Chinese economy has shown itself to be “by far the most powerful economy in the world”. In the United States, GDP has recovered as a result of consumption, but a large part of it goes to China. In this context, Gundlach also questions the practice of stimulus checks: “Is it really economic growth when you lend money, print money, and send checks to people who then turn around — in addition to paying off debt and speculative — they buy goods from Amazon and those goods come from China?” .
It is precisely this development that is one of the reasons for the strength of the Chinese economy. Meanwhile, the US is lagging behind in terms of economic growth, and this is not a new development. “It’s been going on for a generation when the United States is lagging behind,” the expert continued.
Shifts to emerging markets and gold
From the investor’s point of view, Gundlach does not consider domestic companies to be worth investing in in the long term, he sees “the right place” in emerging countries and “non-US companies”. Gundlach himself has already converted and traded in European stocks, and in the future anticipates a “heavy turn” in emerging markets, even if it is too soon for that.
He also sees the precious metal gold facing an upward trend, even if it is currently “hibernating”. However, he was convinced that gold “will go up a lot in the end” on the back of a weaker US dollar.
Finanzen.net Editorial Team
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