The U.S. dollar is the single most powerful herd dynamic in global financial markets today. And financial markets are unlikely to let a good bubble go to waste, emerging market asset manager the Ashmore Group said in a report on Monday.
Between now and the return of inflation in 2016, investors are likely to continue to pour into dollar assets — from securities to real estate. Meet the new bubble: the American greenback.
“The current strength of the dollar is evidently a bubble,†says Jan Dehn, an economist with the Ashmore Group, a fixed income manager with around $70 billion under management. The dollar obeys short-term flow dynamics, while ignoring fundamental arguments. â€If you doubt that the dollar is a bubble, ask yourself this question: when was the last time you met someone who was not bullish the dollar?â€
