Former President Donald Trump says the U.S. dollar should remain king, adding that Bitcoin seems like a “scam” and is watering down the currency. He told Fox News that he believes the cryptocurrency should be regulated “very, very high.” In other news, the Fed is now in the early stages of a recently announced campaign to ready markets for reducing its $120 billion in monthly asset purchases to stimulate the economy. The program was put in place earlier during the pandemic.
Fox Business/Suzanne O’Halloran
Trump: Bitcoin’s a scam, US dollar should dominate
King Dollar should remain King Dollar.
That’s the opinion of former President Donald Trump, who told FOX Business on Monday that Bitcoin seems like a “scam” and the euphoria surrounding the world’s largest cryptocurrency is watering down the U.S. dollar.
“The currency of this world should be the dollar. And I don’t think we should have all of the Bitcoins of the world out there. I think they should regulate them very, very high,” Trump told Stuart Varney adding, “It takes the edge off of the dollar and the importance of the dollar.”
Bitcoin has fallen from its record high of $64,829 to the $36,000, level but is still up around 23% year-to-date.
By contrast, the Wall Street Journal’s dollar index is little changed this year.
Trump, during his tenure in the White House, supported both a weak and strong dollar. When the dollar is weak, it is more attractive and cheaper for foreign countries to buy U.S. goods. During his long battle with China, Trump frequently accused the nation of keeping its currency, the yuan, intentionally low to make exports cheaper.
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The Fed is in early stages of a campaign to prepare markets for tapering its asset purchases
The Federal Reserve is in the early stages of a campaign to ready markets for reducing its $120 billion in monthly asset purchases to stimulate the economy.
Comments by Fed officials in the past several weeks suggest the issue of tapering looks likely to be discussed as soon as the Federal Open Markets Committee meeting next week, and the Fed may be on track to begin asset reductions later this year or early next year.
At least five Fed officials have publicly commented on the likelihood of those discussions in recent weeks, including Patrick Harker, president of the of the Federal Reserve Bank of Philadelphia, Robert Kaplan of Dallas, Fed Vice Chair for bank supervision Randal Quarles and Cleveland Fed President Loretta Mester, whose comments to CNBC came after Friday’s monthly jobs report.
“As the economy continues to improve, and we see it in the data, and we get closer to our goals … we’re going to have discussions about our stance of policy overall, including our asset purchase programs and including our interest rates,” Mester said Friday.
While the discussion may take place, an announcement of a decision to actually taper would be several months later, perhaps in late summer or early fall. That announcement would then put the beginning of the asset reduction further out, perhaps by year-end or early next year. Since the Fed will taper its purchases, that is, reduce the amount it buys by some amount each month, that timeline would still see the Fed purchasing billions of dollars of assets well into 2022, though at an increasingly slower pace.
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CNN Business/Paul R. La Monica
Dollar doldrums are back as inflation worries heat up
Though bitcoin and other cryptocurrencies are the talk of the moment, the good old US dollar still reigns as the world’s reserve currency. But it hasn’t been too mighty as of late.
The US Dollar Index, which measures the greenback versus the euro, yen and several other major global currencies, has fallen about 2.5% in the past three months -— and it’s now down more than 7% in 2021.
Fears of rising inflation are taking a bite out of the dollar, as are expectations that the Federal Reserve will keep interest rates near zero for the foreseeable future despite inflation concerns. Both inflation and historically low interest rates lower the value of a currency over time.
A weaker dollar could be bad news for any American looking to travel abroad anytime soon as well as US consumers looking to buy exported goods, which become more expensive as the dollar falls.
The greenback’s slump is also one of the reasons that prices for oil, food and other commodities and consumer goods have surged lately.
But investors in major blue-chip multinationals are licking their chops: Companies such as Apple (AAPL), Microsoft (MSFT), Coca-Cola (KO), Caterpillar (CAT) and others that generate a big chunk of revenue overseas should get a boost.
That’s because their products are more affordable to foreign buyers, and the value of sales from international transactions goes up when they are translated back into US dollars.
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