Saxo Bank CEO: Short The Euro As It's A "Currency Of Mass Destruction"

Tyler Durden's picture

Authored by Lars Seier Christensen (CEO Saxo Bank) via his blog at,

Has The EUR Reached Its Biggest "Sell" Since Inception?

I have to admit that I have been surprised by the EUR's resilience in recent months...

Readers of my past blogs and editorials elsewhere will know that I think the EUR is a monumentally bad idea. In fact, if it is possible to hate a financial asset, I hate the EUR. It has created countless victims in its trail, de facto bankrupted multiple countries, lost most of an entire young generation in Southern Europe and lead Europe in the direction of a totalitarian super state. So yes, I hate the EUR. May it disappear one day soon, leaving only a sad and frightening memory of an irresponsible, dangerous experiment that is never to be repeated. It will also leave behind gigantic economic and human costs. But it would be far better to take that unavoidable loss soon, before it becomes impossible to reverse. Recovery will follow much sooner if the root cause of the current malaise is removed.

I admit it would be naive to think that the EUR situation will be resolved anytime soon owing to the vast amount of political capital that has been invested in it. The huge European bureaucracy and especially the political elite that feed off the EU will do all they can to prevent the EUR’s fall, at least until it becomes inevitable. This will be either due to pressure from voters (even if they are very rarely consulted in this post-democratic political structure) or from the markets, which eventually must reassume their role that has been perverted beyond recognition during the crisis: the true role of allocating capital and pricing money and assets rationally.

But if we are stuck with this "Currency of Mass Destruction", shouldn’t we at least try to make some money from it? I think it is a fair assumption that the EUR either has already topped out here ahead of 1.4000...

Why are we likely near or at the highs for the cycle? I think a number of elements point in that direction:

1. The economy is extremely weak across the entire EU area and the EUR should never have been where it is in the first place.


2. The Eurozone wants the EUR lower — and needs it lower. The ECB is probably less skilled and less inclined to drive down its currency than other central banks, but this level is simply getting too painful even for the complacent ECB.


3. Deflation is right around the corner and I think the probability is much higher than the 20 percent odds being bandied round by the IMF and others.


4. The Bundesbank seems to be giving up on its usual resistance to quantitative easing. Not a good sign at all as they are the only true guardian of healthy money left in a world of competitive devaluation. Nevertheless, it seems to be happening. The alternative is negative interest rates, but either outcome should drive the EUR lower.


5. There will be more and more unrest in Europe as unemployed youth and public sector employees will make up a strange coalition of bedfellows with small-to-medium enterprises (SMEs) as their interests align against the big business / big bank / political elite coalition. Never forget that SMEs create the jobs, but have very limited access to credit.


6. The populations of Europe will continue to rebel against the undemocratic Brussels, trying to force through one hare-brained, intrusive measure after the next. The obvious, and rare, opportunity to express dissent will be the EU Parliament elections in late May. I think the protest movements will do extremely well in the UK, France, Italy and elsewhere.


7. And finally — technically the EUR looks top heavy after the multiple attempts above 1.3800 in EURUSD in recent months couldn’t get anything going to the upside. As well, volatility is simply too low to stay here forever, and there could be strong momentum and trading interest if the EUR breaks to the downside.

So all in all, things are stacking up against the EUR, even without mentioning the unsustainable debt/GDP ratios, the fragile banking system, the geopolitical embarrassment of Europe’s extreme inability to act decisively and the external economic shocks coming from, among others, China and Russia.

The number of things that can go wrong for the EUR are legion. What can go right is hard to imagine.

Read more here on how Christensen suggests to position for just such an outcome

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johny2's picture


he needs to cover his short position

Max Hunter's picture

Zackly.. Keep trying to use logic. EUR/USD will go to 1.50 the entire time people keep preaching it should be going down..

idea_hamster's picture

Google translated from CorpNewSpeak --> English:

I am sick of a currency that is run by an organization that I can't control.  Who ever heard of actual price stability?!

The whole point of fiat currency is to regressively tax the poor in a way they don't understand.  Otherwise who is supposed to pay the NetJets bill? Me?!  THE HELL I WILL!

LMAOLORI's picture



We need a war to improve the currency!



Ukraine agrees to host NATO war games




"Russia had vital security concerns that could only be met by assurances that NATO would not move into the Warsaw Pact states, where so much Soviet blood had been shed in World War II. President George H. W. Bush (#41) made assurances that if the Soviets were to dissolve the Warsaw Pact, Russia must be assured that the NATO would not fill the vacuum. But his successor, Bill Clinton, broke this promise by quickly taking the former Warsaw Pact states into NATO, and then moved into territory formerly occupied and incorporated into the USSR with the Baltics."



globozart's picture

I am long EUR/USD already.

ilion's picture

I'm client of Forex brokers like Saxo, Citi and Armada Markets and they all send me these reports and analysis and in most of the cases they are wrong. This is all a PR stunt.

OpenThePodBayDoorHAL's picture

Start two free newsletters. In one, you say "it's going up!", in the other you say "it's going down!". Mail to 100,000 people. At the end of a month you have 50,000 people who think you're pretty smart. Repeat. At the end of two months you have 25,000 people who think you're very smart. Repeat. At the end of three months you have 12,500 people who think you're super smart. Repeat. At the end of four months you have 6,250 people who think you're a friggin' genius who walks on water. Announce that your next month's newsletter will cost $250. 6,250 times $250 = $1.562M

Rockin' The Suburbs's picture

I'm with you...and are they trying to cover short term weakness in the almight 'Dollar'?  To telegraphed in my opinion.


Yes, I am a silver junkie; who knows it's going up. 

CPL's picture

All the suckers are broke and all he can trade into is another fiat currency bleeding out.

cifo's picture

Is he saying that a better alternative is the USD?

RaceToTheBottom's picture

Yes, but only while she is Kate Upton.

When gravity changes her from Kate Upton to Kate Downton, then bullish plastic boobs!

_ConanTheLibertarian_'s picture

All paper currencies which are not backed by something tangible are destructive. Why bother trying to catch something which is falling just a little less fast than the other.

disabledvet's picture outright invasion deflationary?
I guess it depends on what the occupyers demands are.

"debt jubilee"?

medium giraffe's picture

I hate the Euro therefore I'm going short?  Outstanding...

Atlas Crapped's picture

Really. Worst case of personal bias to lose your ass on I've ever heard. And besides, the dollar has done so much more for Truth, Justice and "healthy" money ....

1stepcloser's picture

Short debt based monetary systems

Greenskeeper_Carl's picture

exactly. By holding physical gold and silver, I am short every single one of them

Jacks Cold Sweat's picture

Joe Weisenthal said today tha Russian economy is crappy. 


This gentleman says that EUR is doo doo.

Bullshit makes the flowers grow and thats beautiful. 

Sudden Debt's picture

I just had flashbacks from 2009... shorting currencies back than wasn't that smart because they all run in tandem.

dollar down, euro up, dollar up, euro down....

n.d.v.'s picture

The question is: what do you short it against? USD? Puh-leese.

kaiserhoff's picture

My thought exactly.  Yellen has interest rates by the short hairs.  Abe is a world class failure.  China is crashing.

The one wild card here is France.  If they decide to bail, the Euro is done.

FieldingMellish's picture

"This turd is the shittiest of all turds." Really?

timeless21's picture

Icahn's student ?

elwind45's picture

The euro is backed by the Swiss franc peg meaning THE SNB BUYS EURO when it dips below 1.22 a franc. The Swiss buy the thing so if the Swiss like it you might should respect the chocolate waterfall

kaiserhoff's picture

Good point.  Screwed up and fragmented as the world is, that's a key put.

Big Brother's picture

1.20 - but who's counting.

The Euro is also backed by the Yuan and Yen as method of diverisify away from the dollar.  Noone can print Euros unless Germany says so.  I'm going to file this one in my Stopler folder. 

Going long EURUSD & shorting USDCHF.  This has been the only trade working consistantly for me this year.

Squid Viscous's picture

makes perfect sense, so do the opposite in Mr. Yellen's bizarro world 

d_taco's picture

Euro area last Western bastion that runs a trade surplus for years, definitely a to expensive Euro :-)

UK and US running a negative trade balance for ever, can only keep this status quo by telling everybody fairytales.

kellycriterion's picture

Now wait a minute, I've been told the cost of living in Europe is high. If the euro is so strong, then imports should be cheap. If that isn't the case, then what happens to the cost of living if the euro significantly weakens? Yeah I know the Europeans trade with each other but they still need to import some things, like energy. And won't their crackpot ideas mean more importing?

The Europeans are positioned almost exactly where they want to be politically and economically. That is the Europeans who count.

Haus-Targaryen's picture

Shorting the Euro v. CAD seems like a good idea to me, not because it has topped out, or because there is talk that negative interest rates are coming (because they are), but you cannot have two summers of 30% unemployment in Greece and Spain without something breaking somewhere. 

Who all remembers that Drudge Report headline from 2012 "Athens Burns" ... its coming back. 

Besides, the EU has some payback coming to it, via its Ukrainian disaster.  I can think of nothing better than good ol' Vlad spending a few billion USD/EUR on anti-government movements within places like Greece, which are already more politically unstable than Ukraine was. 

All Vlad would have to do is sit back with a cocktail, and watch the EU burn as Athens goes nuts.  I wonder what Ashton will call the Greek protestors then?  Terrorists, or Freedom Fighters as in the Ukraine. 

The EUSSR's hypocrisy makes me sick.

Byte Me's picture

A Muppet reco from SAXO now?

Long EUR cash then.

The ECB doesn't do QE4EVA like the FED. This tells me all I need to know. (Yes of course it's a doomed currency, but when a trader makes a case like this, let HIM put his skin on the line)

Stuck on Zero's picture

Paper currencies represent faith in humanity. Do you have faith?


Byte Me's picture

If by faith you mean theolgical faith, then no I do not. I would dispute that you can concatenate paper currencies with humanity in this way.

However, I do believe in humanity, some might confuse this with naïveté. But since I don't have any faith in human nature (and even LESS in the mendacity of those who climb the greasy pole to be our 'leaders and masters') I'm trying to strike a balance here.

If you don't have faith in humanity imho then we might just as well queue up for the suicide booths.

And I AIN'T doing THAT.

JR's picture

The fiat money system prompts the people to have faith in government; but when government is corrupt, then this faith becomes service to criminals.

A genuine faith in humanity, or human nature, may be our salvation in that it will be citizens who overturn the system and pull the corrupt banksters out of their lairs.

That's what Lewis's book is doing this morning; it is chipping away at the blind faith Americans have in a central-bank-controlled market system.

JR's picture

The definition of fiat money can be a lie - because the value of fiat money is a continuous trajectory to loss. And in the current dollar/euro markets it’s only a question of time till the bridge breaks.

Every single year, the value just gets worse. The central bank printers can prop it up but eventually it becomes zero. And then there’s no prop left with which to prop.

The West’s corrupt central banking system, whereby the nobles get a cut and kickback of everything they print – even taxes – has resulted in gilded carriages for the multi-billionaires and economic collapse for the nations. Until today, western governments exist only to take care of the lobbyists, CEOs, bureaucrats and bankers.

Well,the results are in – and the economy trumps the market.

Henry Hazlitt explains why. Everything is produced at the expense of forgoing something else.

“It is only the much vilified price system that solves the enormously complicated problem of deciding precisely how much of tens of thousands of different commodities and services should be produced in relation to each other. These otherwise bewildering equations are solved quasi-automatically by the system of prices, profits and costs.

“They are solved by this system incomparably better than any group of bureaucrats could solve them. for they are solved by a system under which each consumer makes his own demand and casts a fresh vote, or a dozen fresh votes, every day; whereas bureaucrats would try to solve it by having made for the consumers, not what the consumers themselves wanted, but what the bureaucrats decided was good for them…usually in the interests of some wailing pressure group.” Think financial industry.

"The answers supplied by profit and loss under competitive free enterprise are incomparably superior to those that could be obtained by any other method.”

Excellent analysis, Mr. Christensen.

Quinvarius's picture

These are the Salad Days for central bankers picking commodity prices, my boy--The Salad Days indeed.

andrewp111's picture

Wait a minute. Deflation drives the underlying currency UP. Now, why should the Euro decline relative to the dollar??? It is not such a clear case, is it?

fredquimby's picture

I have to admit that I have been surprised by the EUR's resilience in recent months...


I am a clueless idiot who thought Greece would leave Europe and the EURO would collapse. And it is about to collapse again. Honestly. No really. Listen to meeeee pleeeeease.



adonisdemilo's picture

It will have an opportunity to do exactly what it ought to do after the European elections in May whatever anyone might think, wish or just plain hope that all is not lost.

The general population, especially the young unemployed, have, quite simply, had enough of the bullshit that the Euro fanatics dream up on a daily basis.

When TSHTF the markets will be telling TPTB to take cover because there are some ropes looking for lampposts to see if a few "Mussolini Moments" can convince TPTB to call it a day.

the tower's picture

How is the currency of the united states of europe any different from the currency of the united states of america?


What a load of shit. Saxobank is a bunch of smartasses looking for idiots to put their money in their "trust".

Quinvarius's picture

Why is this fuktard working at a bank if he doesn't even understand that fiat currency prices are set relative to each other by central banking agreements?  There will be no tail event in the Euro because it is the Dollar as long as central bankers cooperate. 

malek's picture

If The Bundesbank seems to be giving up on its usual resistance to quantitative easing
then we should short the EUR at this point?

You got to be kidding me.

MarcusAurelius's picture

Well we know that brokers are traders too and Saxo is no more a bank than Commerce bank was in the US. Is the CME a bank? 

No doubt about it these clowns know how to fleece their clients. In most cases his statement would be like "Stopler" from Goldman telling you to take a position. You would know right away what to do. Do the opposite.

However in this case he just may be onto something here. Yes, the alternative is the USD and yes I would take it over the EURO any day of the week. Even though the fundamentals are not very good at least the US is showing manufacturing growth every month. Yes...although the prints are not great they are still above 50 which shows growth. How many European nations can show this. Maybe one. 

In case it has evaded most traders the EURO has done nothing for well over two years. It has moved sideways not trending in any direction. Measured in pips it might seem like a large move to someone who sees a hundred pip (thousandth of a cent) move as large. It is not. If you are holding a few trillion in debt then it could be large. There hasn't been any trend since 2000 to 2007.

I have been shorting the EURO currency for well over a year and making money. If not on the postion on the swap until it moves (over time measured in months) to where it is likely going which is much lower. 

A 1.5000 currency? Good luck on that one. 

However I do agree very heavily with his assessment. As long as you are not looking for 30 pip moves using high leverage (which is most traders) then the guy has very solid foundations. 

If you believe that the USD is moving higher in the coming months (which I do along with interest rates) then the EURO is indeed headed down. 

CrabNuggetOne's picture

So we should stick with the currency of mass enslavement, the US toilet$. What a load of moronic clap-trap.