The “dollar-is-crashing” trade is the ultimate widow-maker. For decades, it’s confounded more punters than bets against Chinese stocks, Japanese debt and Hong Kong property combined.
Yet might it soon pay off, finally, thanks to Donald Trump’s blunderbuss of a White House? The odds don’t favor it, at least for now.
Neither Trump pushing US debt past the US$25 trillion mark nor his trade war nor his disastrous response to the coronavirus has tanked the reserve currency. The reason, of course, is a dearth of trusted alternatives.
Yet the famous, or infamous, observation by Nixon-era US Treasury Secretary John Connolly that the “dollar is our currency, but it’s your problem” is truer in the Covid-19 era than it was in 1971.