Since the mid 1990’s, the U.S. dollar has benefitted consistently from an official federal government position of a strong dollar policy. This may be about to change dramatically, and not just because newly inaugurated President Trump and his administration have hinted that they want to scrap it.
Co-Founder David Marsh from the London-based Official Monetary and Financial Institutions Forum (OMFIF) advisory group has announced that the dollar collapse of the early 1980s could be set to imminently repeat itself.
Marsh is a financial specialist who advises a variety of asset management companies. He is now forecasting a dollar crash much like the one witnessed over three decades ago. This would represent a sea-change for the U.S. dollar which has been rallying for nearly five years.
Indeed you have seen the dollar continue to rise even as the new American administration has tried to talk it down. The dollar has kept gaining around 10 percent each year (in real terms) over the past from three to four years. Marsh warned:
This is “doing exactly the opposite of what (President Donald) Trump says he wants. I foresee it will carry on getting stronger for a year or so and then we will have a dollar collapse, just like we did in the early 1980s. All the things that Mr. Trump says he wants to do – protect American workers in the heartland – are not going to be helped by this.”
Some analysts have already noted that the dollar may have started to correct back down. In just the past week, the dollar has dropped around four percent from its 14 year long high, from 103.82 to 99.23. This is after all what President Trump has claimed he wants with his November (and after) comments to the Wall Street Journal where he stated that the dollar was “too strong.”
The president’s conundrum is that he is determined and committed to help many of his swing voter constituents from the old dying manufacturing heartland of the country by rebuilding the lost manufacturing sector, jobs, and factories. So far these protectionist policies have been extremely dollar supportive, as is his pledge to spend a trillion dollars on national infrastructure over the next several years.
A higher dollar hurts the U.S. manufacturing exports, which then cost both more money for foreigners to buy and become less competitive against cheaper Chinese Yuan-priced and Euro-based (primarily German, French, Italian, and Dutch made) goods. If the dollar goes back up, David Marsh warns this will cause “real harm” to the people President Trump most wants to help.
In the end, the President’s efforts to talk down the currency (only magnified by his unconventional foreign and trade policies) will likely succeed. This is why analysts like David Marsh give the U.S. dollar rally a year or less before the potentially imminent dollar crash repeats the painful history of the late 1980s.
Is Your Retirement Portfolio Ready for the Inevitable U.S. Dollar Correction?
Nothing can go up forever, not even the U.S. dollar. Whether the dollar crashes and burns or instead corrects down in a more orderly fashion, this is going to have serious consequences for your retirement dollars’ purchasing power. As the American currency inevitably retraces, gold will likely shine as smartest asset class in which to have a portion of your retirement assets.
This chart above shows you how sharply the U.S. dollar index (versus other currencies) crashed in the 1980s and again in the early 2000s. Throughout this time period, gold rose from under $100 per ounce to as high as $1,900. The yellow metal will protect your purchasing power once again as it always has throughout thousands of years in history. This is what makes it the ideal hedge for your investment and retirement portfolios. Ask Regal Assets for your no-cost, no-obligation gold IRA rollover kit now by simply click here to learn everything you need to protect your personal assets through a partial allocation into real, tangible gold.