However, the strong dollar is currently putting pressure on currency deficits and that's why Jakobsen is short South African rand, Turkish lira and Canadian and Australian dollars. 

And the likelihood of a Federal Reserve rate hike in December and money market reform currently underway puts further upwards pressure on the greenback.

Jakobsen says that it is a rule of thumb that a strong dollar will lead to US recession and he believes we will see that in the first part of 2017. At that point, Jakobsen believes that we will see a massive weakening of USD.