Friday, September 21, 2012

Ray Dalio on QE3 and US Dollar

In an exclusive CNBC interview, legendary hedge fund manager, Raymond Dalio, Bridgewater Associates founder, & CIO, shares his thoughts on the Fed's monetary policy and the competitiveness of the U.S. dollar, with CNBC's Andrew Ross Sorkin. "There's a short squeeze on the dollar"

Well, I guess over the near term, I think that it's going to decline because as we're alleviating -- there's a short squeeze in dollars. There's a lot of dollar denominated debt. So that means there's a lot of promises for dollar. That means people need dollars. So when we have the movement in emerging countries and capital flows that way, Europe and European banks lend dollars. They have a funding problem so they need dollars. That all creates a squeeze, but like any market squeeze, once you have the market squeeze that'ses passed, then it goes down and I think we're in the phase of that happening.It's an ugly contest. so I think over a longer period of time, those currencies have their problems, and then we have emerging market currencies. They're not very well developed, but they have a much more fundamentally strong position, and then we have gold as a currency. So that's the comparison

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