What the “Experts” Got Wrong About the Dollar’s Demise

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At the height of the pandemic recession, a June 22, 2020, headline in The Capitalist.com caught my eye: “Dollar Will Plunge 35%, Lose Status As World Reserve Currency.” The article opened with, “The US dollar is on the verge of a 35% collapse. It could also lose its status as the world’s reserve currency.” It quoted Stephen Roach, a senior fellow at Yale University and the former chairman of Morgan Stanley Asia.

Roach made similar statements in other published remarks during 2020. In an interview with MarketWatch.com on June 23, 2020, he warned that the decline of the U.S. dollar could happen at ”warp speed” and “sooner rather than later” in the era of coronavirus.

Given his tenure at Yale and Morgan Stanley, Roach is no slouch when it comes to credentials and credibility. His comments caused some investors to react with fear and bail out of their dollar denominated investments.

And as it turned out, he was wrong.