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Macro Tourist: This Is The Best Long Vol. Position Out There Right Now
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Today's short note is all about FX, Trump, and vol.
Think back to September 2017. Back then, Trump still hadn't figured out he had the power to administer unilateral tariffs on countries. The world was stuck on the idea that Trump's power was actually limited by office.
But in a Kyle Bass interview with Raoul Pal on RealVision, Kyle wisely pointed out that Trump, under the Trade Act of 1974, had the power to unilaterally impose tariffs up to 15% at any time.
“In the last couple of decades, there have been only three times in which the JPMorgan Global FX Volatility Index fell below a value around 7.
Every single time, the dollar strengthened 10% or more soon after.”
How does this sync with Trump’s wanting the dollar weaker???