- The US dollar could collapse by the end of 2021 and the economy can expect a more than 50% chance of a double-dip recession, the economist Stephen Roach told CNBC on Wednesday.
- The US has seen economic output rise briefly and then fall in eight of the past 11 business-cycle recoveries, Roach said.
- Grim second-quarter data cannot be dismissed, he said, pointing out that "the current-account deficit in the United States, which is the broadest measure of our international imbalance with the rest of the world, suffered a record deterioration."
- Roach last predicted a crash in the dollar index in June, when it was trading at about 96. He said at the time that it would collapse 35% against other major currencies within the next year or two.
Roach,a former chairman of Morgan Stanley Asia, also said he sees a more than 50% probability of a double-dip recession in the United States.
He based that prediction on historical evidence, saying that in eight of the past 11 business-cycle recoveries economic output has risen briefly and then fallen.
"It's certainly something that happens more often than not," he said.
Roach last predicted a dollar crash in June, saying it would collapse 35% against other major currencies within the next couple of years. At the time, the dollar index traded at about 96. On Thursday, the index traded at about 94.41.
He said on Wednesday that he expected the collapse to happen by the end of 2021, but he did not say by how much.
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The US is facing a dollar collapse by the end of 2021 and an over 50% chance of a double-dip recession, economist Stephen Roach says | Markets Insider
