The U.S. dollar has become weaker in global markets, yet world renowned fund manager Christian Broda says the dollar will remain the main currency of choice throughout the world. Mr. Broda’s view opposes the majority opinion of most economists, who gloomily predict a dramatic fall of the dollar and the subsequent loss of special privilege and power in America. Despite the many problems attending the U.S.’s actions throughout the world, Mr. Broda points out that the dollar has not weakened nearly so much as foreign currencies have, and in fact seems to have instead strengthened. So, while many financial experts have predicted the fall of the dollar, he maintains that it is actually situation normal, pointing out that many times in history the greenback was predicted to fall, but did not.
Christian Broda has published many academic whitepapers in the past that made uncannily accurate predictions. For instance, in 2009 he accurately predicted that forces in the marketplace would work to keep inflation low for a long period of time. This has indeed come to pass, with inflation remaining less than 5% for several years. His peers with the opposing view claim the days of America being super entitled and free from effects of crippling national debt are coming to a close. They believe as soon as the petrodollar alliance falls apart, so will the power of the U.S. Federal Reserve, reducing the U.S. dollar to fire-starting paper. This is the view taken by bestselling financial author James Rickards in his new book, “The Death of Money.” He makes several cases based on events in U.S. history, starting with the Civil War, where the dollar was destabilized by war and civil unrest, resulting in major damage to the whole world’s economy. Many other pundits agree.
Most expert observers of the world’s money markets are fearful of the Fed’s changes, with quantitative easing being the main concern. However, Christian Broda recommends that investors stay with their fluctuating dollar investments. He has stated, “Now that the Fed may actually exit, the natural conclusion is that the dollar should strengthen even further… Japan is still doing QE, Europe is opening that possibility in recent weeks. It seems wise to keep your investment in the US, and think twice about following the conventional wisdom that emerging markets is the place to put your money.”