Could lose the world leadership of the dollar by the cryptocurrency Bitcoinaccording to Larry Fink, head of the world’s largest asset administrator, Black Rock.
“I hear it from almost every customer, every decision -making manager I am talking about, are more concerned about the economy than any other time in recent memory.”says Fink’s annual letter to shareholders, customers, managers and politicians. The fink is particularly concerned about the importance of the American currency as an anchor of the world monetary system: “The US has benefited from the role of the dollar as a global currency reserve for decades, but this is not guaranteed forever.”
US debt has tripled since 1989. This year, US interest payments exceeded $ 952 billion, more than the defense budget. Blackrock’s CEO predicts that By 2030, mandatory government spending and debt service will consume all federal revenue, threatening a permanent deficit.
“If the US does not control their debt, if deficits escape the control”, the US would lose their position as a provider of the global reserve currency From digital coins such as Bitcoin, Fink warns.
At the beginning of this year, most analysts were still optimistic about the US dollar. Many predicted that the American currency would soon reach the level of one to one with the euro, the so -called exchange rate. This was rarely after the introduction of the common coin.
But things have evolved differently. The dollar was under significant pressure due to US President Donald Trump’s unstable economic policies. Since the beginning of the year, the US currency has lost five percent against the euro.
“Dangerous game with the dollar” Meanwhile, many analysts and economists warn of threats to the dollar. Jan Viebig, Chief Investment Officer of Oddo BHF, accuses Trump of “playing a dangerous game” with the American currency. In Viebig’s opinion, the reduction of the US trade deficit is one of Trump’s priorities. However, it is trying to achieve this goal not only through import duties, but also through a targeted dollar devaluation. The controversial pricing policy of the president is also added.
Fink points out that he is not an opponent of cryptocurrencies such as Bitcoin. “But two things can apply at the same time,” writes Blackrock’s boss. The technology behind cryptocurrencies is an “excellent innovation” that makes purchases faster, cheaper and more transparent. At the same time, however, this innovation could undermine the US financial situation if “investors begin to see Bitcoin as a safer bet compared to the dollar”.
The scene of cryptocurrencies had great hopes for the Trump government because the new president promised to relax the regulations and include Bitcoin in government reserves. But here too, euphoria has faded – since January, the most important and older cryptocurrency, Bitcoin, has lost about 20 percent of its value. Blackrock manages the world’s largest bitcoin ETF, which currently has a volume of about $ 48 billion. Since the beginning of the year, the negotiable mutual capital has lost about 7% of its value.
Fink sees “huge opportunities” for Europe Fink is optimistic about Europe’s financial future. In the last decade, prospects for Epirus have been pessimistic, characterized by slow growth, stagnant markets and cumbersome regulation. “But I think Europe wakes up,” the letter says. “Policy -executives with whom I speak, and speak with many, now realize that regulatory barriers will not be eliminated,” Blackrock’s chief executive argues.
Fink speaks of “huge opportunities” and cites an estimate of the International Monetary Fund: according to this, the reduction of trade barriers within the EU at the level of US states could increase productivity by 7%. This will increase European economic power by $ 1.3 trillion.
Recently, economists’ optimism to Europe has increased, mainly due to the change of direction in German fiscal policy. Experts hope for growth results from loosening the debt brake and the € 500 billion funding package for infrastructure restoration.
This optimism is also reflected in the stock markets. According to Bloomberg Intelligence Service calculations, European shares were performing better than ever in the first quarter of this year than US stock markets. The Pan -European Stock Exchange Stoxx 600 exceeded the S&P 500 in dollar terms by about 17 percentage points this quarter – record.