Macro Guru: US Dollar Collapse Possible

Macro guru Luke Gromen predicts the collapse of the US dollar thanks to the unfavorable financial situation for the United States.

In a new interview with the Trader’s Edge podcast, Gromen says the US central bank is “stuck” with low interest rates because of the US government’s inability to pay higher interest rates on its debt.

Forced to lower interest rates

According to Gromen, the US central bank has even been forced to lower interest rates. According to him, the financial housekeeping of the American government is so bad that it “requires” low interest rates.

The founder of Forest for The Trees (FFTT) says that the government must boost the stock market to be able to collect taxes from the population again.

“Because we don’t make anything in America anymore, inflating the stock markets or lowering interest costs is the only way to support the government. Ideally we do both.

So what’s the easiest way to push markets higher and lower interest costs? That is by lowering interest rates,” says Luke Gromen.

A weaker dollar

In response to the realization that the US government is now in a corner with soaring debt and interest costs, Gromen says a weaker US dollar is the most likely scenario.

He predicts that the US Dollar Index (DXY), which compares the US dollar against a basket of foreign currencies, will fall by 10%, a deep pullback for the world reserve currency.

In principle, that would be good news for Bitcoin, because BTC and the US dollar have a negative correlation. Is the dollar falling? Then that is usually a moment when Bitcoin performs well, and vice versa.

It is clear that Luke Gromen sees little future for the American dollar. Which is special in itself, because there is currently no alternative as a world reserve currency.