The dollar continues to lose value worldwide and fell another 0.7% today, continuing its downward trend that approaches 2018 lows. The US currency has lost about 13% in its strength index since March, from 102 to less of 89.
The currency lost significant value against many currencies in the world, including the euro and even the Brexit-devastated pound.
The Swedish krona was the one that most appreciated with a restrictive monetary policy, as well as the Chinese yuan, which appreciated about 10% against the dollar .
“You speak to most people that are asking me to put money in bitcoin, they can’t even tell you who the person was that developed it or even how it’s actually mined,” the Rosenberg Research chief economist said. “It’s just a classic, follow-the-herd, extremely crowded trade. It’s in a massive bubble.”
Bitcoin reached a record high of $23,777 on Thursday shortly after topping $20,000 for the first time ever on Wednesday, marking a 20% gain over the past day. The cryptocurrency is now up over 200% year-to-date, but Rosenberg said the chart looks “absolutely crazy right now.”
Economist David Rosenberg told Bloomberg he believes bitcoin is in a bubble and investors don’t understand supply dynamics of the cryptocurrency.
Among the most devalued currencies are the inflated currency of Argentina and Turkey.
Switzerland’s currency was the second most appreciated and this has worried its central bank considerably, intervening to moderate the money as a safe haven.
This led the United States to call them currency manipulators, arguing that the Swiss central bank’s intervention this year was 14% of its GDP. This created an increase in the trade surplus, they say, which is apparently due to gold exports, presumably to escape the devaluation of the dollar.
“Interventions in the foreign exchange market are necessary in Switzerland’s monetary policy to ensure adequate monetary conditions and therefore price stability,” said Switzerland.
The dollar has been weakening for decades, but it was largely dominant in the 1980s and 1990s, with a slightly different picture since 2002. The government has printed more and more money to finance all the wars of that decade, with more printing of money to help the banks.
Taxes and a growing economy led to a strengthening of the dollar to the point that the dollar itself was the best performing asset in 2018, after a somewhat rapid increase in interest rates.
Since then, however, there may have been a problem halfway between getting the coin to that broken support of ’92.
Which means that the dollar could reach 80 or even less with the expectation that the Biden government will engage in a loose monetary policy.
This falling dollar is benefiting most assets, but none more than Bitcoin, which today approaches $ 24,000, apparently driven mainly by the U.S.
The scenario is also not pretty in Europe, as around € 1.75 trillion is due to be printed by July next year , in addition to all the prints already made.
This is taking even Greek government bonds into negative territory as the ECB buys them, meaning that only the most desperate savers would keep them.