The collapse of the US dollar will accelerate the adoption of Bitcoin as a reserve currency

Former Morgan Stanley Asia Chairman Stephen Roach believes the US dollar is in trouble and is about towill fall sharply, which will draw attention to such safe havens like Bitcoin (BTC) and gold.

Appearing on CNBC's Trade Nation Program,Roach called the rapidly changing world due to the pandemic, the US efforts to counter globalization, the huge US budget deficit a serious combination that will pull the dollar down.

Roach believes that the time has come to warn investors about the possible collapse of the dollar and the end of the era as a global reserve currency.

«The US economy has long suffered fromsignificant macroeconomic imbalances, namely very low levels of domestic savings and chronic balance of payments deficits. These problems are getting worse as we inflate our budget deficits.

National Savings Rate Adjustedtaking into account depreciation, it will go into a negative plane, which has never been observed in the United States or any other leading economy. And at the same time, America is moving away from globalization, paying attention to its own autonomy.

I believe this is a deadly combination.I think the dollar will do as other currencies do, and that will provide a balance between savings and international imbalances. The dollar will fall very, very sharply.

Roach expects the next year or two dollarwill fall by 35% against other major currencies, as collapse is inevitable. In an article published by Bloomberg, Roach wrote that “cryptocurrencies and gold should benefit from the weakness of the dollar,” as investors will try to insure themselves against collapse.

As for investors on Wall Street and consumers on Main Street, the expert predicts a fall in financial assets. Economic recovery at least to last year's levels may take years.

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