So what is the play today? The US is backed into a corner. Interest rates are near zero (Fed fund rate) and they're buying $75Billion in bonds a month to keep interest rates low. That was $85B and was supposed to taper, but as soon as they dropped a little bit mortgage rates rose and home sales dropped again - the housing market is at another peak with the low interest rates with nowhere to go but down. They keep hoping to get some inflation going by pushing on that rope and it's just not happening. All the money is going into stocks. If we do get significant inflation they'll have to raise rates and destroy the housing market (worse than last time). So we're on the brink. It's hard to short stocks when they're rising so fast - one who could time this thing could make Soros' gain look like lunch money. What is the play?
One thing to remember is that the Soros bet was available because the currency was pegged. Everyone (in the west) has learned that to be a bad thing, in part because of this particular bet.
The US has not pegged their currency. They've made other currency policy decisions under the hope that the US currency can handle the debasement (and so far they have proven true).
Remember that when you short a currency, you also are taking a position about all the other currencies in the world. So rather than say you don't like US dollars you need to say, I prefer X to US dollars and think they aren't currently trading at the right ratio (and if you are shorting you have to account for a very expensive transaction cost).
So rather than asking what the play against the US dollar is, ask which currency you prefer. The international markets do this everyday and so far they haven't found a very compelling alternative.
Their gamble was also time-based. This shift was imminent. No such thing is nearly as critical today. You can be edging into such a play, but having all the stars align - being in the right place with the right amount of capital leverage, and sitting at the precipice of an actionable event happens maybe once every 10-20 years.
You can be right about the problem, but being able to enter and exit a market to benefit from such prescience requires a lot of timing. If the wreck is slow motion, you can lost most of the utility of your insight by transaction fees, interest, and the contrarian, emotional whims of the market you play in. It's better to have other peoples' money at your disposal. Hedge fund managers are in a great spot.
