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USD To Lose Its Reserve Currency Status Within Next 15 Years (Druckenmiller)

US
  • In a CNBC interview today, veteran investor Stanley Drucknemiller mentioned that the US Dollar is very likely to lose its reserve currency status within the next 15 years.
  • Following the titanic increase in debt to fight the pandemic, CBO estimated that if the 10Y rises to 4.9% (CBO 'neutralization' projections), the interest expenses will soar to 30% of US GDP every year. As a result, he thinks that the Fed will have no other choice than finance the interest expenses, which will result in a dramatic depreciation of the US dollar in the long run.
  • Druckenmiller mentioned a few months ago that he has become increasingly bullish on Asian currencies following the sharp increase in debt in the DM market relative to Asian economies.
  • He also commented at the end of last year that for the first time in a long time he was starting to be worried about inflation, which he said could reach up to 10% in the next 4 to 5 years with the merging of Fed and Treasury that has been happening since the start of the pandemic.
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