Are you a dollar bear? If so, you’re probably a retail an at-home, retail investor getting screwed by the ridiculous margins on your forex account.
That’s because all the cool kids are now dollar bulls. Roubini is warning about a dollar rise, everyone’s concluding that we’re headed to Japan, and now look who else is a dollar bull.
Bloomberg: The U.S. dollar may appreciate 10 per cent against the euro in one to three months, said Marc Faber, the publisher of the Gloom, Boom & Doom report.
“Maybe the dollar has made a turn, it can easily rebound by 10 per cent,” Faber said in an interview in Istanbul. “It may have started already since the asset markets started to go down 10 days ago.”
Yep. The same guy who normally says stuff about how dollars will be worth as much as toilet paper thinks it’s due for a rebound.
So what’s going on? Well, for one thing, the dollar’s gotten killed over the last year, so right off the bat, it’s reasonable to assume that that trade is running its course. But beyond that, counterintuitively, being a dollar bull is now the gloomy, negative position. See, it’s the weak dollar that’s inflating the stock market, helping real estate stabilise, improving the prospects for American exporters, and keep the assets owned by banks above water.
So to be a dollar bull is to be negative, to think the Fed will fail, and the economy will backslide. And since being negative is always cooler, that’s the new cool opinion.