Pimco portfolio manager Curtis A. Mewbourne writes that the dollar is losing its status as world reserve currency as the U.S. pumps massive amounts of money into the system. (I – and many others – have repeatedly written on this issue).
The dollar will probably depreciate the most against emerging market currencies. Pimco is advising clients to diversify out of the dollar.
Indeed, as Bloomberg points out:
Bill Gross, who runs the $169 billion Pimco Total Return Fund, is also warning the U.S. currency will fall.
Holders of dollars should diversify before central banks and sovereign wealth funds do the same because of concern government budget deficits will deepen, Gross said in June.