Taps Coogan – September 1st, 2021

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Jeffery Gundlach, the founder of DoubleLine Capital and the manager of one of the largest funds in the world, recently spoke with Yahoo Finance in a wide ranging interview in which he unambigously declares that his single greatest conviction is that he is bearish on the US Dollar over the next several years.

Some excerpts from Mr. Gundlach:

“My number one conviction looking forward a number of years, I’m not talking about the next few months at all, I am talking about several years, is that the dollar is going to go down…”

“The US has enjoyed the status of sole global reserve currency for decades and it’s an enormous benefit. We also have the biggest military in the world which kind of goes hand in glove with being a reserve currency I think. But, in the aftermath of the lockdowns and the pandemic that continues to linger on, the strongest economy in the world, by far, has been the Chinese economy. The US economy has bounced back with a lot of consumption, but a lot of that consumption is going to China… The Chinese economy is growing so rapidly that estimates of when the Chinese economy will be the largest in the world keep getting pulled forward… Now the estimates are maybe in the 2020s… China has made no secret of the fact that they want to be a player… and they’re spending like crazy on their military… Also they have huge savings. They have a culture of savings… With the US growing debt like crazy… that is fueling the majority of our so-called economic growth… Is it really economic growth when you borrow money or print money, send checks to people, turn around and buy goods on Amazon, in addition to maybe paying down debt and speculating, and these goods are coming from China? We are running our economy in a way as if we are almost not interested in maintaining global reserve currency status.”

“The dollar has been in a series of declining highs for decades. It goes back to the 1980s… When we get to the next break to the lower level, the dollar is going to go past the most recent lows… there is easily 25% downside in the US Dollar…”

There is more to the interview, so enjoy it above. 

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