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Time to Short the Garlic Eaters
The garlic eaters don’t want to repay their debts, and the beer drinkers don’t want to lend them any more money. That pretty much sums up the financial tensions that exist within Europe right now. The PIIGS countries of Portugal, Ireland, Italy, Greece’s, and Spain are lurching from one emergency financing to the next. Never mind that much of that money was borrowed to buy Mercedes, BMW’s and Volkswagens which enriched Germany’s economy mightily.
This is one of many reasons why I think the Euro will continue to fall against the dollar, possibly to as low as the mid $1.10’s sometime this year. The US is growing, and Europe is not. American interest rates are rising, while Europe’s are not. This always attracts capital to flow out of the low yielding currency and into the high yielding one, which is creating a rising tide of buyers of greenbacks and sellers of Euro’s.
The Euro has just enjoyed a nine cent rally against Uncle Buck. The Spanish and Portuguese bond issues came off better than expected. Germany’s Chancellor Angela Merkel hinted they might bend a little on terms. The UK’s CPI came in hot. Then China and Japan came in and said they would happily take down a chunk of the high yielding debt. With ten year Japanese Government Bonds yielding a paltry 1.23%, can you blame them?
There has been additional wildly optimistic comments for president of the European Central Bank, Jean-Claude Trichet, warning of coming inflation driven interest rates rises, I don’t believe it for a second. ECB authorities are notorious for attempting to jawbone their beleaguered currency up, with frequent with short term success, but with long term failure. You might as well try and turn a sow’s ear into a silk purse.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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Who's your counter-party smart guy? You willing to risk 100% loss if he bails? We're on the edge man, and you're talking about this shit? Convert to something valuable before the world realizes what's up.
The same analysis can be done between beer/wine countries in Europe and beer/wine states in the US.
Apparently the mediterranean countries (and their descendents) have cultures with poor financial planning (maybe because it is sunny all the time) vs. northern European countries (who always have to prepare for winter year after year).
Cinderella's two ugly sisters looking desperately for prince charming. Bickering amongst themselves in hidden ways known only to hedgefund hedgehogs and banksta hound dogs.
Prince charming has all the assets and the ugly sisters all the debts. Wicked sorceress is stewing her FED brew chanting her Benbarnfication mantra: All that rises never comes down in the USA. Let them all sink, we will only know the high rise surge into this brand new century. As we innovate our way into heaven on earth. Please forget broke-back debt mountain, please look away from mirage of climate change. Just buy Wall Street and we will all be sooooooooo rich once more. Alleluia they sing in Jerusalem, let the Mamlukes charge the rabble in Cairo. With Mustapha Mond looking glum. He is well and truly stuck under a truck. Can't see which model it is...The russians are coming with their gas monopoly along with ayatollah Iran? Ronald Reagan must be uneasy in his grave. Raise high the roof beams carpenter... Its a storm warning from outer space...hey, Orson Welles...I can see you out there on your laser beam!
"The US is growing."
Actually, no it is not.
I suppose you based that imbecile comment on "American interest rates are rising," which if you had just half a brain would know is a direct result of inflationary pressures, NOT actual organic growth.
it's just a game of who falls first. they're both pherked
Kicking the can down the road has been great sport. Wonder when that can will veer off into the ditch? The road is getting narrower and bumpier.
and more steep too
Al this phony growth caused by money printing
makes me wanna buy gold not dollars(neither euro)
Good luck with the paper game.
Can you backup that claim or is it a mindless stupid racist remark without any backing?
Yes, germany is growing, but it doesnt help us germans if the piigs dilute the value of our currency too much.
I think the Lusitania / Titanic example is quite to the point.
Europe is an iceberg, Germany is the pretty bit poking up above the water but the rest of the ugly mess is lurking beneath the surface.
Germany is growing, right? And the Euro is nothing but the Deustche Mark with new looks.
How much can Germany grow with slowing equipment orders from China as they wind down???
New looks, and a lot of struggling hangers-on with their hands out for German money.
That said, it really should be noted that much of Germany's success over the last decade was achieved by selling high-price German goods to impoverished peripheral Eurozone nations who, by rights, would not have been able to buy them without artificially low interest rates (put in place to help German reunification) and easy finance provided by German banks.
In this latter sense, Germany's 'Success' is much like China's. They booked a lot of profits from selling goods to people while also lending those people the money with which to buy them. This model works splendidly, until you try to collect the money you are owed.
And in the end the taxpayer got the bill.
German employees took the pain of austerity the last 10 years and accepted lower life standards to become more competitive. Just to see that the debtors failed to pay the bill and have now to take the debts of the banks. Essentially German employees worked for nothing.
All fiat currencies are falling in tandem. Matching the Euro against the dollar is like matching the lusitania against the titanic. They are both going to sink to the bottom......just at different rates of speed.
The best bet is hard commodities. Like gold and silver [if you can actually get some]
Love the analogy. +1.36
well, you probably can't get any to put your hands on,
but I have this lovely lot of paper I can sell you.....JPM tells me how much it is worth every day.
one thing, other than in the fantasy of Ben's statistical world, the US is NOT growing. Moreover, we see gas go up much more and the entire middle class is going to work and no place else....which is perfect for how the government sees us, a class of serfs. but not good for preserving the "growth" fantasy.
that said, the euro is a good short, trader, but please, let's not pretend the US is growing. Not here. We know what's happening.
The US is growing in as much as The Bernank is saving the global economy.