Yesterday PIMCO reported that it had completely abandoned US government bonds.Perhaps more importantly, PIMCO now has a gigantic position in cash — it’s biggest ever.
Is PIMCO betting on a vicious rally in the dollar?
There are a few reasons it could happen:
- The crackup of the Eurozone will help the dollar.
- The end of QEIII is looking more and more likely.
- Anti-dollar sentiment is extreme.
- Commodities are all looking peakish, etc.
- Aggressive spending cuts in DC.
The signs are building up.
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