Fears that the US dollar will collapse are nonsense, and doomsayers are often hawking gold, investment chief says
Fears that the US dollar will crash are completely overblown as the greenback cannot be replaced anytime soon, the CIO of Commonwealth Financial Network wrote in a recentBrad McMillan acknowledged that he has been getting a flood questions about the dollar in recent weeks, largely asking whether its value will collapse and render savings worthless. But that can't happen in the short to medium term, he added.
"As long as the US is the largest open trading economy, as long as everyone in the world wants access to the US economy, and as long as it is a lot of work and a great inconvenience to switch, the position of the dollar as the global reserve currency is secure," he wrote Tuesday. McMillan pointed out that even while China has been trying to elevate the yuan to challenge the dollar, its government still holds more than a trillion dollar of US assets.
In his view, there are three key factors in the dollar's favor: the sheer size of the US economy, the freely convertible nature of the dollar , and the relative political and economic stability of the US compared with both Europe and China. "When you look at all the pieces, the US dollar is not only the established choice and, in most cases, the smart choice, but it is the only choice," he said."There really is no alternative."
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