The Dollar Is Likely To Become Stronger

Nouriel Roubini : "The Dollar is likely to become stronger rather than weaker. The thing about the U.S. compared to other advanced economies...the fundamentals for the U.S. are much better - in CNBC

Roubini : the dollar, the yen, and the Swiss franc better investments than Gold

At a recent conference on the shores of Como Lake in Italy Nouriel Roubini told the European economic leaders that the “US has run out of bullets.” and that More quantitative easing (treasury bond purchases) by the FED is not going to make any difference . Roubini explained that in the case of a double dip recession, he believes that the dollar, the yen, and the Swiss franc may be better investments than gold because the currencies are more liquid than the gold market.... Gold will be one of the preferred safe haven investments if the economy slips back into recession , "But in that situation, things like the dollar, the yen, the Swiss franc have more upside in a situation of rising risk aversion because they are much more liquid than the gold market", Roubini said.. Roubini believes that the price of Gold will rather stay at the current levels : "I believe that gold is going to trade around current level. There are two extreme events that lead to a spike in gold. One is inflation, but we have no inflation in advanced economies. If anything, there is a risk of deflation. The other event in which gold prices go up is the risk of a global financial meltdown, and that tail risk has been reduced because we backstopped the financial system." He explained

Roubini : China has no option but to accumulate dollar reserves

Nouriel Roubini :" In the short run, China has no option but to accumulate dollar reserves. Why? Because if they stop doing that, their currency would appreciate sharply while their exports are plunging. China cannot afford to let its currency appreciate any further, and to prevent the appreciation given their current and capital accounts they have to buy another $300 [billion] or $400 billion of reserves this year alone.

But I have seen a huge number of new initiatives in the last month after China expressed its worries that suggest they are pushing for the yuan to become an international currency and a reserve currency. . . .

They want to create a yuan zone in Asia. They are pushing for inter-Asian trade to be conducted in yuan. They are taking several steps that will lead their own currency to become an international currency. "
via The Washington post

Roubini Dollar Will Fall 15 to 20 Percent

“I see anemic recovery of economic growth in the U.S., and the U.S. current account (deficit) is still very large,” New York University Professor Nouriel Roubini, a professor , said at the Troika Dialog Russia Forum in Moscow , as reported by Bloomberg.

“In the next two or three years, the dollar has to weaken further on a trade- weighted basis.”

Regarding The American Economy Roubini Said “There’s going to be better economic news for a couple of quarters due to temporary factors, such as restocking, fiscal stimulus, and base effects,” .

“In the second half, economic weakness is going to reappear again. On a trend basis, the dollar has to weaken.” Roubini added

The Dollar not the only Reserve Currency Nouriel Roubini says

Nouriel Roubin said that The dollar’s status as the world economy’s only reserve currency will end, Roubini is a New York University economics professor also nicknamed Dr Doom he predicted the financial crisis years before it happened .

“We may see complementary reserve currencies,” Nouriel Roubini said at a conference in Athens on June 11th . While it’s “not going to happen overnight,” the development “will diminish the role of the dollar over time.”

The dollar’s status is under threat as the leaders of Brazil, Russia, India and China discuss ways to substitute the dollar with other assets, amid a fear of a US budget deficit and a soaring inflation due to the massive amount of fresh dollars that the FED has been printing lately. China alone owns more than $744 billion of U.S. Treasury bonds among its $2 trillion of foreign-exchange reserves. , Russia Saudi Arabia Japan and Germany other big US dollars and treasury bonds holders ...