Archive - Jun 13, 2010

After having contracted notably to only -93,325 net short speculative contracts, it appeared that speculators could be loosening their death grip on the EURUSD. The most recent numbers from the CFTC commitments of traders report, however, indicates that after last week, EUR shorts once again piled back in, after the second largest adverse move in EUR sentiment in 2010. -18,620 contracts were added to short positions, the second largest such move in 2010, following only the -28,576 from March 23, resulting in a speculative Euro FX exposure of -111,945 net short contracts: just a fraction higher than the all time low ever seen of -113,890 on May 11. As this data is for the week ended June 8, the late week shakeout in which the EURUSD climbed all the way back to $1.21 is therefore just a case of all the new weak hands getting shaken out, after ambitions of a quick profit did not materialize. We now expect the net short number to once again drop below the -100,000 mark, and for the EURUSD speculative onslaught to continue.

What's another $50 billion?

Another sign of the imminent return of the Deutsche Mark comes this weekend courtesy of BoersenNEWS.de, one of the largest German stock market portals. Due to popular demand, the portal has reintroduced quotations in DEM, alongside those in EUR: "Due to the ongoing Euro crisis many investors expect the return of the Deutsche Mark. A recent survey, showed that 39% of 1,364 börsennews.de users, would like the good old Deutsche Mark reintroduced. Börsennews.de has responded and will immediately display share prices in Euro and Deutsche Mark." The commentary on this symbolic switch is enough to indicate just how the majority of Germany feels about this issue: "With the symbolic reinstatement of the Deutsche Mark Börsennews.de is not supporting to the abolition of the Euro, however the desire of many citizens for economic security. One thing is clear, the German Mark represented the economically strong and healthy Germany. The Euro represents a cracked economic system, not only throughout the world, in Europe, but above all in Germany." We couldn't have said it better ourselves. Suddenly, Jim Rickards' observation that Germany and Russia could be very well considering a new gold- and oil-backed currency, does not seem all that very ludicrous to us.In fact, should the two countries indeed be in such deliberations (and for their literal recent proximity , look no further than the seating chart in this year's Mayday parade in Moscow), the end of fiat could be approaching much faster than previously expected.