Bond manager superstar Bill Gross says the dollar will keep falling.
That’s because it protects U.S. trade by pushing down our export prices and pushing up our import prices.
"I think the dollar is an over-owned currency,” he told CNBC. “The Chinese, the Asians have basically owned too many dollars for too long."
The U.S. government favors the dollar’s decline, Gross says. "Let's face it, a lower dollar is basically a protectionist barrier."
To be sure, the Chinese aren’t so happy about the drop.
“Let's face it, they (the Chinese government) are earning zero percent on their Treasury bills or close to it, and they're suffering a depreciating currency at the same time. So their assets are going down by 5 percent to 10 percent a year," Gross said.
Gross reiterated his view that the economy is in a “new normal,” with slower growth.
As a result, debt will be slashed, he said. "The new normal basically recognizes that we're in an economy that's de-levering and that we'll move at some point to an average level of leverage that's much lower than before."
Not everyone agrees with Gross about the dollar. Investment legend Jim Rogers says the currency is due for an upward correction before it falls again.
“Whenever you have everybody on the same side of a boat, you know it’s time to move to the other side for a while. We may have a rally in the dollar,” he told Bloomberg.
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