Nobel laureate Paul Samuelson, whose introductory economics text was used by college students from the 1960s to the 1980s, sees dark days ahead for the dollar.
While he approves of the Federal Reserve’s massive easing, the MIT economist tells The Atlantic magazine, “I don't want you to think that I think everything for the next 15 years will be cozy.”
“I think it's almost inevitable that, with a billion people in China wide awake for the first time, and a billion people in India, there's going to be some kind of a terrible run against the dollar,” Samuelson says.
“I doubt it can stay orderly, because all of our own hedge funds will be right in the vanguard of the operation. And it will be hard to imagine that wouldn't create different kind of meltdown.”
Still, on the fiscal side of the ledger, Samuelson says more stimulus is necessary. “One shot spending gives you only one-shot response,” he says.
“It's got to be sustained. The way we got out of the 1929 Great Depression in the U.S., and this happened not only in the U.S. but also in Germany and each place in which there was almost a third unemployed, was heavy deficit spending.”
Other experts worry about a dollar crisis too. Investor Jim Rogers tells Seeking Alpha,
"Somewhere along the line, someone's going to say, 'I'm going to start selling (dollars) before everybody else does.' That's when you have a currency crisis."
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