U.S. policymakers could “change the world” by devaluing the dollar, one analyst has claimed.
Speaking
to CNBC’s “Squawk Box Europe” on Monday, independent macro advisor Hugh
Hendry said quantitative easing programs — where central banks buy
assets like government bonds to inject liquidity into the economy — were
not working.
Instead of targeting bonds as a form of economic stimulus, policymakers
should look to the value of the greenback, he suggested.
Quantitative easing — we’re being missold something,” Hendry argued.
“Simply publishing or expanding these inert central bank reserves and
trying to scare us all to death that they’re actually printing real
money is a fraud.”
The underlying problem, he claimed, is that there is a shortage of dollars in the global market.
“America
has decided over several decades to impose a global dollar standard, a
monetary standard on the rest of the world,”
Hendry said. “It’s one
thing to be the king, (but) you have to behave regally, you have to
behave like the king. So if you’re going to impose a dollar standard on
the world, you have to stand by and provide sufficient liquidity. And
that’s actually where they’ve been failing.”
Hendry said the
widespread sell-off in March, where global markets plummeted amid the
height of fears around the coronavirus, was partially due to investors
having to sell assets in order to create dollars and repay debt.
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The U.S. can 'change the world' by devaluing the dollar, analyst says
