Guys like Peter Schiff argue that the massively leveraged US dollar is bound to crash, as the government is forced to run the printing presses in order to prop up ailing banks. It’s a popular view among gloomsayers.
Kyle Bass at Hayman Advisors has been among the most negative guys out there on the global economy, but sees a somewhat different outcome, arguing instead that the US is relatively under-levered compared to others out there.
Sure, our banks are levered, as are households, but bank assets, as a percentage of GDP are “relatively” tame. We’re no Iceland, and we’re no the UK. Everyone will have to run the presses to avoid a banking collapse, but the US may have to run it less than others.
Here’s his latest letter, via Zero Hedge, in which he thinks mass global defaults are an inevitability, but that the US dollar will continue to be strong.