The economist predicted a structural collapse of the dollar

The US dollar is facing a large-scale devaluation, which may lead to its structural collapse. This will be a necessary measure to solve the problem of the country's growing public debt. Maxim Chirkov, Associate Professor of the Department of Economic Policy and Economic Measurements at GUU, shared this opinion in an interview with Izvestia on April 28.

"The collapse of the dollar is a realistic scenario. The Western economy, including the American one, is facing serious problems, the main of which is the huge US national debt. Already in November 2023, the cost of its maintenance exceeded the entire defense budget of the country," the expert noted.

He stressed that the only realistic way to reduce the debt burden could be a sharp weakening of the dollar.

"To fully solve the problem, devaluation should be not by percentages, but by several times — perhaps three, five or even ten times," Chirkov added.

An alternative, he said, could be a default on government bonds, but this would lead to an even sharper fall in the exchange rate, as financial markets are already reacting: the dollar index is declining, and this trend will continue.

The expert also noted that the administration of Donald Trump is trying to control the process, but success is not guaranteed.

"The American economy is not coping with debt servicing at current rates. Most likely, the debt will be "written off" through inflation and the weakening of the currency," Chirkov summed up.

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On April 17, Italian journalist Vincenzo Lorusso reported on the threat to the economies of European countries posed by the trade duties imposed by Trump. According to him, this is due to the fact that a dramatic economic situation has already developed in Europe. He clarified that in Italy, the agri-food sector will suffer the most from tariffs.

On April 2, Trump announced the introduction of 10% base duties on products imported from other countries. For the European Union, this figure was raised to 20%, and for China — to 34%. On April 9, the US president announced the suspension of duties previously imposed on a number of countries for 90 days. He also announced an immediate increase in tariffs on products from China to 125%. On April 10, this figure reached 145%.