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Why The Euro Is So Strong, Or Why The Market Expects $700bn Of Fed QE3

Tyler Durden's picture


The question puzzling currency markets is why the EUR is so strong.  While we have argued that during the risk-off period of the last month or so post-LTRO2 (before Tuesday) EURUSD strength appeared to be driven by repatriation flows and balance sheet reduction, new information over the last couple of weeks driving the expectation that growth will be weak enough in the US to keep US policy very stimulative for a nice long time, we tend to agree with Steven Englander of Citigroup who argues that it looks very much as if QE3/Fed-stimulus anticipations are behind the EUR relative strength recently. Indeed the recent USD weakness is pretty much across the board, suggesting that it is less EUR attractiveness than USD unattractiveness that is driving the EUR’s gains.  That said, I think the buzz around various euro zone measures to help out banks and ease the rigidities of the fiscal compact is also helping support the EUR by reducing tail risk, but right now the USD/Fed is the bigger story. Back of the envelope math based on the Fed/ECB balance sheets and EURUSD implies the market expects around $700bn of QE3 and given swap-spread differentials there appears to be little liquidity premium to reduce this expectation.

The current EURUSD rate implies a Fed/ECB ratio of around 1.2x which infers that the market expects around $700bn of liquidity from the Fed relative to the ECB in the short-run...

And there is little additional liquidity premium (over interest rate differential models) as swap-spreads and EURUSD begin to correlated more highly and also with risk...


Consider first the evidence that the EUR is positively correlated with risk (Figure 1). 

The chart above presents the euro’s beta on changes in other measures of risk appetite. The chart is scaled so that a positive value shows a risk-positive correlated and we use two-day changes to mitigate the impact of different closing times in different markets.  What it shows is that the underlying correlation of the euro with risk is positive. It is not clear why this is the case, although I would argue that a risk-positive environment makes investors more willing to tolerate tail risk than a risk off environment and the reserves accumulation/diversification cycle probably is more intense when risk is on.  Investors may be wrong in trading the EUR with a positive risk correlation but it is hard to argue that they do not do so.

Now consider the charts below. In each case the blue line represents the S&P, the yellow line US two year yields and the green line EUR. What we see are episodes in March/April; 2009 and Aug/Sep 2010 when US 2 year yields fell and the S&P rallied.  Presumably these are period when growth was disappointing (i.e. investors drop their expectations of policy rate hikes) but equity markets and the EUR rally because the low rates support valuations even in a low top-line growth environment. As a colleague expressed it, even a tiny stream of returns is worth a lot when the discount factor is close to zero.  So we have a series of episodes in which risk is bid, and the euro with it, despite economic disappointment.

Now consider Figure 4 which shows the most recent moves in 2yr yields,the S&P and the EUR.  We see a similar pattern – 2yr yields drifting down and the S&P and EUR running up. The scale of the rallies is not as big as in the other episodes but the family resemblance is there. For the USD risk-on is a negative and low rates are a negative, and that is what the market is focused on.

Now consider Figure 5 below which presents the EUR, the S&P and 2yr Treasury yields from 2009 to the present (hard as it is to believe that 2yr Treasuries were yielding 0.80% just over a year ago). The big picture is that the recovery has disappointed everyone except investors.  Going back to 2009 and even early 2011,  the fixed income market thought there was an imminent recovery that would enable the Fed to tighten – since mid-2011 that expectation has disappeared.  The trend in equity prices suggests that there has been a stream of surprises either top-line on expected profits, or in terms of the rate used to discount this stream of returns.  The low discount factor to be applied to the expected stream of profits may have been especially important over the last couple of quarters when profit growth has eased.

Bottom line for the last three years is that risk appetite can be positive on the whole, even with disappointing economic performance and this positive risk appetite and asset market environment supports the euro. From Figure 4 it is clear that the degree to which the EUR is positively correlated with risk diminished in H2 2011 when the sovereign debt crisis spread to Italy and Spain.  However, no correlation that we run with respect to any indicator of risk (US S&P,  EM MSCI, VIXC etc)shows a negative correlation of the euro and risk – the correlations show a diminished but still positive beta (back to Figure 1) and this is true whether the correlations are over shorter or longer spans.


Putting this together we have a currency that is risk positive through tail risk shrinkage when risk appetite is strong and a Fed that supports asset markets via low rates, despite disappointing economic asset market performance. It adds up to a weak euro when risk is off and investors do not yet anticipate a policy response and a stronger euro when the policy response arrives (carrying with it extremely unattractive yields in US asset markets).

What can go wrong?  It seems to me that the market bias to buying EUR in periods of risk appetite can easily disappear if it looks as if European policymakers have lost control over the euro crisis.  I would stress that  recent experience suggests that investors do not care much how the euro zone deals with the tail risk as long as they find a mechanism for doing so.  If not the euro and the euro zone could easily fall.  It is also the case that if the euro situation becomes sufficiently dire, there will be a negative global impact both on activity and risk appetite. Our betas may not change but we can have positive betas as asset markets collapse, as easily as when they rise. To be sure the Fed has not announced, let alone implemented, an additional easing round so it is possible that the new found positive asset market environment will fade, taking the euro down with it.

Net, net I would argue that the new information over the last couple of weeks is the expectation that growth will be weak enough in the US to keep US policy  very stimulative for a nice long time. Whether you like it or not, the euro remains sufficiently correlated with risk for this to be a plus.

As a footnote, earlier this week, I presented some evidence that in H2 2012, balancing sheet cutting and repatriation of foreign assets may have also helped the euro. The two explanations are not necessarily inconsistent, but I would argue that in a positive risk environment the dominant factor would be investors risk appetite, provided that the sovereign debt crisis was not in an acute stage. 


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Fri, 04/27/2012 - 21:28 | 2381566 Cult_of_Reason
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Nobody in the media is talking about it, but the most important number today was 2.1% core PCE (personal consumption expenditures price index — Bernanke’s favorite measure of inflation). It is finally above 2% (spiked up from 1.9% to 2.1%). There is no way Bernanke can do QE-3 when core PCE is above 2% (QE3 is dead).

Fri, 04/27/2012 - 21:36 | 2381575 Stoploss
Stoploss's picture

Wonder if they changed the index weighting?

Gold may be a smidge underpriced.

Fri, 04/27/2012 - 23:28 | 2381706 TheSilverJournal
TheSilverJournal's picture

Was thinking the same with that CPE. There's just nowhere for the money to go right now. The 10 yr. already has negative real rates. I guess there can be a sharp sell off in stocks and commodities to drive bond yields even lower, but how much more negative can real rates get? Seems like the market's at a magic point in which money won't flow into bonds any more, so it has to flow into commodities and equities which will drive the inflation train and the inflation train will drives yields higher as investors get tired of deeply negative real rates of interest. Higher yields just means more printing, which means inflation.

I think we just experienced the calm before the storm. The calm is ending.

Sat, 04/28/2012 - 08:18 | 2381983 Bobbyrib
Bobbyrib's picture

So if people sold stock and bought commodities it could potentially drive up the price of oil further?


Good thing it is not speculation. Baah Baah /sarcasm.

Sat, 04/28/2012 - 12:46 | 2382338 Harlequin001
Harlequin001's picture

There is only one chart to watch now, and that is inflation expectations.

Cue that, and you know when Benranke will ease...

All the rest is bullshit...

Fri, 04/27/2012 - 21:36 | 2381576 donsluck
donsluck's picture

Don't forget their 2nd mandate - employment.

Fri, 04/27/2012 - 22:12 | 2381629 Cult_of_Reason
Cult_of_Reason's picture

Yes, but during the conference on Wednesday, Bernanke explicitly said that “multiple studies have shown” that when inflation is above 2%, there is little if any benefit from QE to help the unemployment (Bernanke was answering a question from a media bonehead crying and whining about Bernanke not using unemployment above 8% as an excuse to print and help to re-elect Obama).

Even Bill Gross (who usually gets insider information directly from the Fed) said yesterday on Bloomberg TV that he is no longer betting on QE3.

Fri, 04/27/2012 - 22:26 | 2381641 fonzannoon
fonzannoon's picture

If Bill Gross got inside info from the fed I am pretty sure he would not have shorted treasuries.

Fri, 04/27/2012 - 22:38 | 2381650 Cult_of_Reason
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When Gross shorted the treasuries, everyone (including the Fed) was talking about an "exit strategy". He got the correct information from the Fed (via Greenspan who is nowadays employed by Gross – Gross actually signs Greenspan’s checks), but then even the Fed (not only Gross) was surprised and forced 180 degrees to abandon the exit strategy.

Fri, 04/27/2012 - 22:41 | 2381655 fonzannoon
fonzannoon's picture

I don't doubt your information, I just have learned one simple fact, rates are not allowed to go up. It's just that simple. It is why they did not bother to stress test the banks for a rise in rates.

Sat, 04/28/2012 - 00:58 | 2381765 LouisDega
LouisDega's picture

Yes, But it keeps the discussion amongst the adults going. Must have conversation. It's good.

Sat, 04/28/2012 - 08:24 | 2381990 DavidC
DavidC's picture

The Fed can't allow rates to go up as it is leveraged at over 50 to 1. Imagine the effect on the Fed if rates double from where they are now (0.5% isn't a lot but it's a doubling of 0.25%!).

I keep saying this but if Bernanke can keep the markets up just by jawboning or hinting at QE, he won't do it. He'll only do it when he HAS to, which will require another sharp stock market sell-off.

I've been thinking that this will occur after the Facebook IPO in May - I don't think it can be keep going until the election although I could be wrong (I was expecting a sell-off after the poor GDP yesterday but the market went UP!).

What do I know?


Sat, 04/28/2012 - 09:57 | 2382088 Sam Clemons
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The Fed can't go bankrupt no matter how leveraged they are.  They don't have accounting, they don't need to make profits, and they can create as much money as they want.

I agree with everything else you said, but I think that rate rises effect the government's ability to borrow (and pay back) from other countries - which is less inflationary than printing the borrowed money into existence.

Sat, 04/28/2012 - 10:10 | 2382106 fonzannoon
fonzannoon's picture

Than why borrow from anyone else?

Sat, 04/28/2012 - 10:32 | 2382144 Sam Clemons
Sam Clemons's picture

Creates illusion of stability, and if nations that you could crush militarily are willing to lend you money at 2% interest, why wouldn't you?

Sat, 04/28/2012 - 12:00 | 2382281 DavidC
DavidC's picture

The biggest buyer and holder of US Treasuries is the Fed.


Fri, 04/27/2012 - 23:30 | 2381708 Id fight Gandhi
Id fight Gandhi's picture

I think they threw in the towel on that. Just keep the stock market up and wait until people fall off the count.

Sat, 04/28/2012 - 03:28 | 2381847 Sudden Debt
Sudden Debt's picture

Like in europ, the ecb is now giving money to the states. Directly and not the banks, for America this will also start to happen because america now needs to print it's own money.

Sat, 04/28/2012 - 09:44 | 2382077 CPL
CPL's picture

bingo. Now they are getting choked to death from their own piss poor planning. I suggest we spam the world with made up demands of QE3.


We'll use the same lies to "help" the cause.  Push it right over the cliff.  You know what's worse than no options in this situation.


No brakes.

Sat, 04/28/2012 - 10:04 | 2382099 Sam Clemons
Sam Clemons's picture

The incredible thing is that the stock market used to mostly rise without the Fed's help.  One can argue that it has been trying to "help" get the stock market to keep going up for the last decade.  The results have been less than impressive.

Sat, 04/28/2012 - 11:27 | 2382224 CPL
CPL's picture

And over 10 years, the market is down horribly working in inflation.  Not a positive thing when a pension needs a 7% increase every year at minimum to continue basic growth and liability counters.


I'm reading this morning that the teacher pension funds are short in Nova Scotia by a couple billion dollars and they haven't begun to finish the audit.  I'm curious to know what the situation with the world's largest investment group the Ontario Teachers Union is.  A year ago, everything was fine in NS, this year somehow money vanished.


Can't wait to see what the Army pensions, the NSA pensions, CIA pensions, FBI pensions.  The same people helping enforcing the current mess are more than likely paying for it in spades with their pensions and don't even know it.  The teachers didn't until checks started bouncing and someone was forced to take a look.


Funny thing about crooks running things is they don't discriminate against who they steal from.  The economy of scale thing works in there as well.  All these pensions are all similar in terms of investment practices from department to department.  It's impossible to pay peter to pay paul because it's all fungible.  It's a big pool of loot, so if your neighbour is short on the till cash out, it's a sure thing so are you.  In terms of investors.  The teachers unions are a force of nature, they do not get fucked with, ever.  It appears that is no longer the case though.


What chance do the tiny pension plans like the US Army, FBI, NSA, DHS or CIA..or any of them have?


None, none at all.  Bet a beer they are nearly empty and rolling out the last of the nickles left in them.

Sat, 04/28/2012 - 05:09 | 2381891 Rip van Wrinkle
Rip van Wrinkle's picture

Don't worry, that can be fixed quite easily. Lie. It's what politicians and their cronies do.

Fri, 04/27/2012 - 21:46 | 2381581 Cult_of_Reason
Cult_of_Reason's picture

You would need some major market selloff (~20%) or outright negative GDP numbers for Bernanke to justify QE3 now.

 As far as EUR/USD, the most likely explanation is PBOC buying EUR to stimulate Chinese economy (higher EUR, more Chinese junk exports). Many are forgetting that RMB is pegged to USD (not to EUR); so Chinese can make their currency weaker and increase exports by knocking down USD (knocking down RMB) and propping up EUR.

The Euro Puzzle


Fri, 04/27/2012 - 21:54 | 2381595 Caviar Emptor
Caviar Emptor's picture

@Cult: There is a way...It's called Biflation aka killing the buying power of your income and net worth. 

Biflation provides camouflage for both killer inflation and deflation. It's brilliant! At every turn Ben can point to the numbers and tell us that everything is tepid, even Goldilocks -like. It's the moderation's moderation: keep pushing real household incomes and net worth down plus economic activity and you can hide even double-digit inflation 

As long as both forces are at work all the numbers will cancel to near-zero. And depressed economic activity keeps a brake on prices just as prices keep a brake on economic acitivty. A thing of beauty. 

Fri, 04/27/2012 - 21:55 | 2381606 docj
docj's picture

Indeed - had I to guess this is precisely the strategy. It let's the Soros' and Buffets get richer while the rest of us are eating out of their garbage cans.

Put another way, it turns the western world into a slightly cleaner (at first) version of India.

Fri, 04/27/2012 - 22:10 | 2381618 Caviar Emptor
Caviar Emptor's picture

@docj: well put. It's a strategy to accelerate the transfer of wealth to China and elsewhere. I saw several reports this week about US multinationals adding 3X as many jobs abroad. Apple's report confirms that China is the olny engine of corporate growth (cudos, Tyler). And you can bet banks have their fat little fingers in the pie. Call it planned-obsolescence for an entire country. 


Thirty-five big U.S.-based multinational companies added jobs much faster than other U.S. employers in the past two years, but nearly three-fourths of those jobs were overseas, according to a Wall Street Journal analysis........Nearly 60% of the revenue growth between 2009 and 2011 at the companies in the Journal's analysis came from outside the U.S.

Fri, 04/27/2012 - 22:25 | 2381638 Cult_of_Reason
Cult_of_Reason's picture

Inflation (hidden tax) and Government Debt = Stealing People's Wealth


"If it happens in politics you can bet that it did not happen by accident". 


John Maynard Keynes:

"By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some. The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose."

Sat, 04/28/2012 - 08:31 | 2381995 DavidC
DavidC's picture

Caviar Emptor,
Can you explain that to me please, I'm missing something?

If wages are being pushed down and real inflation is double digit then the effects are being exacerbated not mitigated, surely?

Isn't stagflation is a better descriptor, as we have both deflation of wages etc and monetary inflation at the same time.


Sat, 04/28/2012 - 12:35 | 2382316 Caviar Emptor
Caviar Emptor's picture


Yes, effects are being exacerbated, exactly my point. Buying power of consumers is getting crushed by combined decrease in real median incomes and household net worth (as mainly impacted by perpetually declining real estate values). And yet simultaneously there is increase not just in the price of necessities (energy, food, transportation, telecomunication) but in the cost of home ownership (insurance, taxes, upkeep and maintenance, improvements, ultilities, muni services, security etc). Whammy and double whammy. 

Stagflation was a term invented in the late 1970s to describe the situation that existed back then which is very different than now. I was at Wharton back then and was privy to all the discussions. Basically, the inflation of the 1970s was mainly caused by what was called "the wage spiral" INcomes were rising sharply and that that was viewed as causing "demand-pull inflation". Also house prices were rising sharply as a result but also because boomers were in peak family-building mode. Also raw materials and transport were comparatively cheap inputs at that time. 

There was no deflation of any kind during the 1970s. Offshoring and outsourcing of industries and jobs had barely begun after Nixon's China deal (1971-2). There was no where near the level of overcapacity we see today. There was no where near the level of depressed labor force participation. There was also no huge credit bubble and Glass-Steagle was still in full force so there was no near-death banking sector bust pulling down all financial sub-sectors. 

The results are and will continue to speak for themselves. During the 1980s there was a strong attempt to stp the growth of wages and incomes. And it has been successful as real median income has hardly grown in over 30 years. This is more than a middle class squeeze. This is the death spiral of the middle combined with what I call the Downsizing of America

Sat, 04/28/2012 - 15:03 | 2382512 DavidC
DavidC's picture

Caviar Emptor
Many thanks for your reply, fascinating and interesting.

And yes, I agree completely with your last paragraph, true here in Europe and the UK as well.

And we're either being ruled by public school educated career politician ninnies with no real world experience AT ALL (Cameron of the Conservatives, Clegg of the Liberal Democrats and Milliband for Labour) or the mainly ex-Goldman technocrats like Draghi et al.


Fri, 04/27/2012 - 21:52 | 2381596 dick cheneys ghost
dick cheneys ghost's picture

Currency Wars?

Fri, 04/27/2012 - 23:01 | 2381680 jimmyjames
jimmyjames's picture

Currency Wars?


Great compounded explanation of the whole shitshow-

Sat, 04/28/2012 - 01:10 | 2381775 TheSilverJournal
TheSilverJournal's picture

Except nobody really wants a weaker currency. They just want an excuse to create money. What better excuse than "We're printing this money and handing it out to whom we deem worthy" than for the good of the exporters?

The truth is that efforts should revolve around the consumer. There's no other reason to produce than to consume and there's no other reason to export than to import something else in return. The more goods at cheaper price available to the consumer, the better.

Sat, 04/28/2012 - 08:34 | 2381997 DavidC
DavidC's picture

Well, the Fed must REALLY not 'want' a weaker currency, given the dollar has lost 97 plus percent of it's value compared to 1913...

And those Chinese students must have misunderstood when they laughed at Geithner saying the US is committed to a strong dollar.


Fri, 04/27/2012 - 22:37 | 2381648 jimmyjames
jimmyjames's picture

As far as EUR/USD, the most likely explanation is PBOC buying EUR to stimulate Chinese economy


Not to forget--the Swiss and Japan are helping-

Sun, 05/27/2012 - 17:26 | 2467668 narnia
narnia's picture

Bank runs are hyper deflationary. People are parking EUR in mattresses & it's killing fractional leverage capability. The ECB just hasn't pulled a Japan yet, active bidding up Spanish & Italian banks.

I wouldnt be surprised if the Fed, PBOC & BOJ in there somewhere buying up the global EUR diversification.

Fri, 04/27/2012 - 21:51 | 2381594 Tuffmug
Tuffmug's picture

You have mistaken Ben Bernanke to be a rational, consistent, non-psychopathic human being and QE3 to be a choice constrained by reality or consequences. Ben will do whatever it takes and QE or the threat of it is Ben's favorite tool. 

Fri, 04/27/2012 - 22:00 | 2381613 Nid
Nid's picture

Risk on or else, Bitchez...

Sat, 04/28/2012 - 13:24 | 2382383 Nid
Nid's picture

-3 ? For simply channelling Bagger Ben? Tough crowd.

Fri, 04/27/2012 - 21:58 | 2381605 LowProfile
LowProfile's picture


Nobody in the media is talking about it, but the most important number today was 2.1% core PCE (personal consumption expenditures price index — Bernanke’s favorite measure of inflation). It is finally above 2% (spiked up from 1.9% to 2.1%). There is no way Bernanke can do QE-3 when core PCE is above 2% (QE3 is dead).

And directly related to that is the most important second derivative of PCE...


Obama can't get re-elected if they lose control of it.  $5+ a gallon gasoline will insure he's a one-term wonder.

IMO this argues strongly AGAINST MORE (immediate) QE...  But WTF do I know...

Fri, 04/27/2012 - 22:06 | 2381623 fonzannoon
fonzannoon's picture

Obama can't get re-elected if they lose control of it. $5+ a gallon gasoline will insure he's a one-term wonder.

I can't take this gasoline price argument anymore. To think that is the impediment to more QE is insane. First off the media will spin it as Iran's fault and most people will be sympathetic to that. Secondly if gasoline prices got out of hand they would look to Bernak to fix it. Is it backwards retarded? Yes. But thats how it goes.

Sat, 04/28/2012 - 04:26 | 2381874 StychoKiller
StychoKiller's picture

HOW is The Bernank gonna fix it?  CTRL-P will only make the $ of gasoline shoot higher!

Mon, 04/30/2012 - 14:26 | 2385811 paulbain
paulbain's picture


StychoKiller wrote:

HOW is The Bernank gonna fix it?  CTRL-P will only make the $ of gasoline shoot higher!

Simple, actually. The federal government will blame speculators and Iranian tensions for the increase in fuel prices, and then impose PRICE CONTROLS on fuel. From Obama's perspective, this would "solve" the problem of higher fuel prices.

-- Paul D. Bain



Sat, 04/28/2012 - 17:39 | 2382704 xela2200
xela2200's picture

Gas at $5 is the fault of those evil speculators, but fear not your commander in chief is already dealing with them. Nothing to see here. Move along.

Mon, 04/30/2012 - 14:28 | 2385821 paulbain
paulbain's picture

I cannot believe that NINE persons "junked" this comment. It is one the best in this entire thread-of-discussion. Dolts.

-- Paul D. Bain


Fri, 04/27/2012 - 22:45 | 2381612 BlueCollaredOne
BlueCollaredOne's picture

I respectfully disagree as that being the most important number of the day.

To paraphrase Robert Wenzel, "Prices have increased 2,241% since the start of the FED."

In my field of work if I am off by more than 5%, shit hits the fan creating a domino effect felt by all others involved in the project.

I'm so glad the FED's fuckups don't carry the same weight.

Sat, 04/28/2012 - 11:15 | 2382211 funthea
funthea's picture

Yes, but the 2,241% is represented over peoples lifetimes. Not as easily seen or comprehended by the sheep. I get your point, but the comparison timeline is off.

Sat, 04/28/2012 - 08:24 | 2381989 TWSceptic
TWSceptic's picture

Bernanke will say anything to talk himself out of a situation. He might do it anyway regardless of inflation. You make the mistake of thinking that the fed and bernanke are actually honest and consistent.

Fri, 04/27/2012 - 21:32 | 2381572 LongSoupLine
LongSoupLine's picture

Something's got to give.  Too much, too fast and Europe is screaming, "crash!"

Fri, 04/27/2012 - 21:33 | 2381573 dick cheneys ghost
dick cheneys ghost's picture

thanks ZH for bring these stories........i



Are you guys familiar with "Operation Easter Egg"??????????


"Secret talks between 200 Arab billionaires in Abu Dhabi, UAE took place during Easter weekend in April 2010 to discuss the death of the petrodollar and the realignment of military protection of Middle East oil fields, according to a source close to Jim Willie of the Hat Trick Letter"

Fri, 04/27/2012 - 22:57 | 2381627 BlueCollaredOne
BlueCollaredOne's picture

Reading that leaves a strange feeling in my mouth, and I don't think it's from the cheap wodka I'm drinking on this fine Friday evening.

Most of the governments in the middle east are products of the CIA or some other proxy thereof. How quickly we forget that since the 1950's we have been involved in a few Iranian revolutions, as well as started their nuclear program, not to mention every other country in that region.

*Disclaimer:* Clicking on that link will probably put you on a list considering Wikipedia is a DARPA project

If you are in fact Dick Cheneys ghost, well then I'm sure you could teach me a few things on this topic.

Sent from my spiPad

Sat, 04/28/2012 - 06:48 | 2381931 falak pema
falak pema's picture

Consider this meeting as a PLAN B strategy today, which becomes Plan A when the wind truly turns! There is an increasing feeling that Arab OIL should now go East, where its markets lie for the next fifty years. If that trend accelerates, Arab investment WILL also move Eastwards, not in USA/EU. 

Big game changer; obviously the money line has to follow to bolster where your investments are! 

This is supposed to happen around 2015-2017 when the current can kicking will no longer be sustainable in first world and when China will truly emerge with an oil sector demand to feed its burgeoning CAR industry. By 2017, China will be the biggest market for individual cars, far beyond USA and EU. 

These are the tipping point factors of economic rebalance, that the 1% Oligarchy, like Apple today, are fully behind. So forget the PAST CIA policy. US Oligarcy commands them and if their collective interests are to move Eastwards, the government sector of US will follow; even if there will be greater tension between MIC USA and MIC China in the Pacific basin. But that is all part of globalisation shift, and consequential risks.

Global Oligarchies Are not ONE big happy family. They cooperate when its in their common interest. Just look back, Metternich's strategy to block off Napoleon's NWO lasted from 1815 to 1914. By then, Bismark's Germany was ready to challenge resulting PAx Britannica and surrogate French Empire. Imperial THieves always fall out in the end. 

Fri, 04/27/2012 - 22:11 | 2381626 barliman
barliman's picture


Risk appetite?

Investors's risk appetite?

Who ARE you? The janitor? A junior sysadmin?  Doesn't at least one of the TD's monitor the blog during the weekend?

We have been awaiting QE3 for 10 months and two significant market downtrends ... and it still has not happened.

Sure, Bernanke Barbie says all kinds of "ready to act if necessary" statements when you pull her string and CNBC gets all "wee-wee'd up" if the idea of another major sell off was to occur; but this is all theatrics and has nothing to do with reality.

Bernanke put the bottom in for Europe at the end of November. Perhaps those dollar swap lines should have been called QE3 but it wasn't going to happen when Buckaroo Ben is still breathing - because then he'd have to explain how much money went to whom ... and that shit just isn't going to be documented.

The center of gravity is somewhere east of Central Europe. If Spain, Italy and then France go down the tubes - the Chairsatan will be keeping his powder dry to come to THEIR rescue. 

If China's economy crashes or their political order buckles, good old Uncle Ben is going to get a lot of rice pounded up his ass but he'll just take a $ 1 trillion USD enema of Chinese bank swaps to ease the pain.  Why do you think the Chinese are still holding Treasury debt?

The Fraudclosure story is over. The deal is done. If you expect more LSAP's from the FED, take two Advil with a shot of Grey Goose and hold your breath until the election is over.

Weekend assignment: Contemplate what happens if Benny just sits tight and doesn't do shit.  NOT.JACK.SHIT.


Fri, 04/27/2012 - 22:47 | 2381665 Hondo
Hondo's picture

It would be great if he did jack-shit

Sat, 04/28/2012 - 01:47 | 2381808 barliman
barliman's picture



... but he won't becasue he still believes he can fix it somehow.


Sat, 04/28/2012 - 04:19 | 2381869 whirlybird rules
whirlybird rules's picture

do you mean for the American citizen???

Fri, 04/27/2012 - 22:23 | 2381637 fonzannoon
fonzannoon's picture

Who has been waiting for QE3 for 10 months? Who are you even talking to?

The Chinese are holding those treasuries because they are stuck with them. They can't dump them on the market. Ask Jim Rickards why, he actually has some credibility and he explains it pretty well and does not come off so fkin smug in the process.

Contemplate what happens if Benny just sits tight? Maybe the market continues to call bullshit on him and wait for him to act.

Fri, 04/27/2012 - 22:43 | 2381659 barliman
barliman's picture


Not you, noob

Like all noobs, too much posting, no reading and no thinking.  The Chinese have dumped a crap ton of Treasuries. Zero Hedge called it, it happened, others denied it, and then the Fed reported it had happened. Go ask Jim Rickards to explain fungible to you. He won't get it right ... but it will keep you busy trying to figure out multi-syllabic words.

Your closing two sentences ... you just type - you don't read it - you just type.  Amazing.

"Maybe the market continues to call bullshit on him ..." - explain for us when the market called bullshit on him? You must know if you say they will continue to call bullshit on him.


P.S. Knowing you have impaired abilities I thought it best to point out the 'Reply' link in the lower right hand corner. All the smart people use it. Try it.


Fri, 04/27/2012 - 22:50 | 2381670 fonzannoon
fonzannoon's picture

Noob? You truly are an awesome combination of a nerd and a douchebag. It's rare. You think people like you, but they don't. You want them all to see your brilliance, but they treat you like a fungus. You are like a foot. People accept a foot, just keep it far enough away.

Do you really insult Jim Rickards and hold yourself above him with your insult? Are you that much of a pompus shmuck?

Fri, 04/27/2012 - 23:02 | 2381679 barliman
barliman's picture



You used the Reply button. See, learning IS fundamental.

Back to business - you tried to avoid answering (or maybe you didn't read it?) the question. No worries. Here it is again:

"Maybe the market continues to call bullshit on him ..." - explain for us when the market called bullshit on him? You must know if you say they will continue to call bullshit on him.


Fri, 04/27/2012 - 23:08 | 2381688 fonzannoon
fonzannoon's picture

I prefer EGGSELLENT. It combines the geek humor you exude. Go with that from now on.

Simply put, since the last two fed meetings where the msm (let's just use cnbc, Leisman) has put forward that the fed sees no more reason for more QE. Over the past 2 years this same type situation has been followed by drops in stocks/commodities which give the fed breathing room to act. This past meeting was followed by traders marching out exclaiming they were shorting metals etc. Both stocks and commodities are not giving way and are in fact going up. When twist ends either price discovery will take place in treauries or Ben will announce another program. The exception would be if Europe went belly up and sent people flying into treasuries, which is possible. 

As far as china and treasuries....

WASHINGTON—China remained the top holder of U.S. Treasury debt in January, but Japan threatened to take the No. 1 position with another month of record holdings.

Overall, foreigners were net buyers of long-term U.S. financial assets in January, according to the Treasury Department's monthly Treasury International Capital report, or TIC.

According to preliminary data, China's holdings rose nearly $8 billion to $1.160 trillion from $1.152 trillion in December. Meanwhile, Japan continued to be a heavy net buyer of Treasurys; its holdings hit a record level of $1.079 trillion in January. Japan remained the second-largest holder of Treasurys, lifting its holdings by $21 billion from December





Fri, 04/27/2012 - 23:35 | 2381715 barliman
barliman's picture



Absolutely and completely incorrect - how did you do it?

The top holder of U.S. Treasury debt is .... the Federal Reserve!  Go look it up.  Really sad because this has been covered EXTENSIVELY on Zero Hedge  - but you weren't here to read it ... noob. Here's a hint. What did the Fed purchase during QE2?

"Over the past 2 years this same type situation has been followed by drops in stocks/commodities which give the fed breathing room to act."  - REALLY ??? And just WHAT actions are you referring to that the FED took action on after a drop in stocks/commodities?

"When twist ends either price discovery will take place in treauries or Ben will announce another program."  - Twist can't end because price discovery in Treasuries would bring about TEOTWAWKI. You not knowing this is way beyond noob and clear on over into STUPID territory.

"The exception would be if Europe went belly up and sent people flying into treasuries, which is possible." - If Europe goes belly up, only the dumb money will start buying Treasuries because Europe going belly up will be TEOTWAWKI.   NOTE: As I originally pointed out, this will not stop Ben "The PIIGS Fucker" Bernanke from trying to save Europe once again. There just won't be enough money ... because when Europe goes belly up, China goes belly up, Japan goes belly up, Australia goes belly up, India goes belly up and the USA goes belly up - aka TEOTWAWKI

Start reading up on the last three years worth of articles posted here. You never know. You might learn something.


Fri, 04/27/2012 - 23:51 | 2381729 fonzannoon
fonzannoon's picture

First off that was regarding foreign holders of debt. I cut and pasted because I figured you would understand that. My bad for overestimating you.

Second what actions am I referring to with the fed? QE2 followed QE1 (hence the name) and Twist followed QE2.

Third, we actually agree regarding twist, I just lack your arrogance with that whiff of desperation.

Regarding Europe....whatever you say, I am going to sleep.

I read ZH and a lot of others with credibility. I will promise to keep an eye out for Barliman on Amazon.

Good day to you.

Sat, 04/28/2012 - 00:20 | 2381744 barliman
barliman's picture



Sorry, but you did NOT qualify it as top foreign holder of debt ... and neither did what you cut and pasted.

"WASHINGTON—China remained the top holder of U.S. Treasury debt in January ..." - Now where do you come by your tendency to try to rewrite history, I wonder? Especially dumb because everything you posted is right up above.

So your official answer is that QE1, QE2 & Twist were the market calling bullshit on Bernanke?  Just trying to be clear here ... because otherwise you still have NOT answered the original question.

Nite nite, noob.


Sat, 04/28/2012 - 12:16 | 2382297 DavidC
DavidC's picture

In fairness you did not say foreign holders, neither did you link the quote you referred to, and barliman was correct in his response that the Fed is the largest holder of US Treasuries. China and Russia have been divesting themselves of their Treasury holdings.

They've also been buyers of Gold.

"When twist ends either price discovery will take place in trea(s)uries or Ben will announce another program." - I agree with you but I'd like to know what he will do. Twist moved the maturities out from short term debt to longer term debt (can kicking!), but what can he follow that with? Moving 30 year out to 100 year?


Sat, 04/28/2012 - 12:59 | 2382352 fonzannoon
fonzannoon's picture

David I respect what you are saying and respect the intelligence and intellect of Barliman. Unfortunatley it is overshadowed by his arrogant method of delivery where he tries to speak down from some sort of pedestal. What I cut and pasted was from the WSJ which illustrates that in the past few months China has been increasing their holdings. They may be down from say last year. But they are up this year. The reason given was fear in Europe.

As far as what Ben will do...whatever it is I am guessing it is mapped out already.

Sat, 04/28/2012 - 13:03 | 2382358 fonzannoon
fonzannoon's picture

and it will be globally coordinated.

Sat, 04/28/2012 - 16:38 | 2382646 eddiebe
eddiebe's picture

Barliman, you speak with such authority. First of all what is TEOTWAWKI? And secondly, you claim there won't be enough money for another QE type operation. There is plenty of money, and if there isnt the central banks can always print it.

Fri, 04/27/2012 - 22:56 | 2381657 earleflorida
earleflorida's picture

    The 'NWO' experiment, facilitated by this 'Jekyll & Hyde" - this omnipresent unknown entity, that has run it's isle, and shallow listed course.

    After a century without a glitch,... the almighty oligopoly masters, have fallen out of sequence. Rotating backwards on a negative slope, colonizing acrimonious simony gone terribly awry! 

     How ironic it is - that all things revert back to the means? The grand-finale, the openness,... the ubiquitous free-flowing communication, that the 'Grand-ole-Internet' has provided this once enslaved "NWO' with - has now been freed of it's shackle's!

     *"Oh what a tangled web we weave, when first we practice to deceive",  hear, hear, dear Sir... Walter Scott!

      The once fattened beast of the 'NWO-Oligarchy', is now off to the abattoir,... with the! Prepared for, and by due-process marinating of guilt, thus shall sweeten the taste of revenge. Indeed this much anticipated feast.

     Alas,... being that. This fatted ghastly beast,... soon to be sacrificed and indulged. Tis the acquiescence, the joyous and untimely exuberance craving the festival table sudden mystique. 

     Resounding, the solemn toast - that of a roundabout  peculiar strange justice-is-ours? But let us not think and dwell, lest we spoil the moment - a century to long, rounded feat, that best be served cold, with a farewell bona`petite! 

Fri, 04/27/2012 - 23:19 | 2381691 BlueCollaredOne
BlueCollaredOne's picture

Im not sure if I agree with your post or not.

Between the superogatory nomenclature, the overuse of asterices, hyphens, commas, and adjectives that would make an English major reach for a dictioniary I don't know what the fuck you are saying.

If this was really fight club, I'd beat the shit out of you for being a pompous ass. I see you live in Florida, where Amerika goes to die, but if you do want to make a difference you need to appeal to Amerikas youth, which I represent.

PS: Pardon my grammacital errors, I'm a product of the publik sk00l cistem

Fri, 04/27/2012 - 23:41 | 2381720 LowProfile
LowProfile's picture

He said TPTB fucked up, and are about to get fucked up... The ass.

I agree, but expect them to put up a fight.

Sat, 04/28/2012 - 00:27 | 2381748 barliman
barliman's picture



I just thought he was high on some shit and decided to come on here to fuck with people's heads.

I agree the TPTB will always want to put up a fight ... until the day they look at their monitors, say "OH, SHIT!" and start a mass exodus of private planes out of the New York area airports.


Sat, 04/28/2012 - 01:22 | 2381792 LowProfile
LowProfile's picture


LowProfile:  He said TPTB fucked up, and are about to get fucked up... The ass.


barliman:  REALLY?

I just thought he was high on some shit and decided to come on here to fuck with people's heads.

...That's how he does it when he's high.

barliman: I agree the TPTB will always want to put up a fight ... until the day they look at their monitors, say "OH, SHIT!" and start a mass exodus of private planes out of the New York area airports.


Durden: these guys are going to take your balls. They're going to send one to the New York Times, one to the LA Times press-release style. Look, the people you are after are the people you depend on. We cook your meals, we haul your trash, we connect your calls, we drive your ambulances. We guard you while you sleep. Do not... fuck with us.

...We also maintain, fly and direct traffic for your planes.

Sat, 04/28/2012 - 03:58 | 2381856 the tower
the tower's picture

Sorry to disagree. They already won. They won while you were whining about AAPL and Europe.

If you are serious about putting up a fight the time is NOW.


This is the new Bill of Rights:

1. You have the right to buy Apple/buy AAPL 

2. You have the right to watch Apple TV


You are being kept busy while feeding on the leftovers. You are not fight club.

Sat, 04/28/2012 - 04:01 | 2381858 the tower
Fri, 04/27/2012 - 22:48 | 2381668 bshirley1968
bshirley1968's picture

They are pumping the euro up in the futures market to prepare for the coming euro print-fest.  The euro will get eased first followed by the dollar.  This way the euro has room to get weaker and the dollar stronger.  Then when PrintinBennie starts up in the fall, the dollar will have room to move lower.

In the end, there will be trillions of dollar and euros added to the money supply, BUT on the exchange there will be little difference in the euro/dollar levels from where they are now.  Prices will gradually go up on the public, and by playing the game this way they can print, print, print, and inflation will be somewhat contained.  The Chinese, Russian, and Arabs, etc. are getting wise to this game and that is why we are getting the defiance and backlash fromt the BRICS.  There is no doubt the US and western Europe are in bed together on this scheme, but the dollar/euro action is simply another ponzi game being played on the rest of the world.

Fri, 04/27/2012 - 23:13 | 2381690 earleflorida
earleflorida's picture

i second that

Sat, 04/28/2012 - 01:32 | 2381798 LowProfile
LowProfile's picture

Timing is everything.

Fri, 04/27/2012 - 23:16 | 2381696 ekm
ekm's picture

The rest of the world has already wised up and are bypassing the dollar by establishing barter style bilateral agreements.

They can print debt dollars and debt euros as much as they want, they are already toxic, nobody wants them.

Fri, 04/27/2012 - 23:37 | 2381719 BlueCollaredOne
BlueCollaredOne's picture

I want to agree with you, but I can't. You assume that tbtf ( no capitalization deserved) represent the vox popilu, but we're all smart enough to know that's not the case.

If the world is willing to eat toxic Monsanto food, why the fuck do you think that they can make a logical analysis of the piece of paper that says it is worth a certain value?

The two major countries who are investing in gold ,China and Russia, are the same countries who imprison dissidents for speaking out against them. Expect the same here soon

Fri, 04/27/2012 - 23:51 | 2381725 LowProfile
LowProfile's picture

I recently traveled to the "developing world".  I have been to various "developing" nations several times in my life.

People in the developing world have experience with currency devaluations.

This most recent time, I had a conversation with the cab driver about the pending USD collapse, and gave him a brief synopsis.

He looked surprised, and replied that he and his friends had just been talking about it, that they had been reading about it on the Internet.

This was several months ago.

So I fucking think they fucking fuck well CAN fucking make a fucking logical fucking analysis about the fucking worth of fucking pieces of fucking "dilute at fucking will" paper.

And FYI, Russians know all about currency devaluation (just happened to them) and the Chinese gov't recommended that their citizens buy gold and silver.

Sat, 04/28/2012 - 00:12 | 2381735 BlueCollaredOne
BlueCollaredOne's picture


We're on the same team, so hostility isn't necessary when replying to my comment. This isn't MSNBC where emotion truncates substance.

That being said my post is not directed towards people like you who know what's going on.

I am a union blue collar worker who does not invest in his 401k, but buys lead and silver instead. I also contribute to Ron Paul.

Junking is for bitches, not bitchezzz. Also, it looks terribly suspect when my post has one down vote, and yours has one up vote. Hey Tyler, how about disabling voting on your own post


Sat, 04/28/2012 - 01:30 | 2381796 LowProfile
LowProfile's picture

I'll admit I love me a friendly fight.  And maybe we misunderstood you, but it looks I'm not the only one who voted you down.  Fact is, people are waking up all over the world.

And you started it with puttin' down the prols with yer fightin' words, so I just thought I'd educate you until you yelled STOP, went limp or tapped out.  Cuz I relate more to those "turd world" peeps (as that fat little troll Michael Wiener AKA "Savage" LOL) likes to call them than I do to the effete self-deluded fucks who were born on third base, stumbled a few steps and think they hit a home run.

And get some Au with that Ag, it looks good on a red neck (I should know).

Sat, 04/28/2012 - 00:15 | 2381742 ekm
ekm's picture

(I haven't voted on your post)

I think that rejecting electronic dollars and euros thus establishing barter style bilateral agreements is a no brainer and quite obvious for them, for one reason only: 70% of the income of their populations are spent on food. Nobody wants a revolution there.

A hungry man with a gun, has nothing to lose. A hungry man without gun, just dies (north koreans).

Sat, 04/28/2012 - 00:32 | 2381751 BlueCollaredOne
BlueCollaredOne's picture

I agree 110%

As Gerald Celente says "when people have nothing to lose, they lose it.".

I reiterate, I'm not millioniaredilloraebogusfiatfuck here to try to be contrarian, I just think us as a whole sometimes we become complacent when everyday we see financial crimes go unpunished.

I relate to the to common man more than most people here. Alexa tells me that most here are 65 years old +

I have never left this country. I barely graduated high school. However, I still believe that we both believe in the idea of liberty, and that idea is worth fighting for.

Sat, 04/28/2012 - 12:20 | 2382305 DavidC
DavidC's picture

The US is going to have to build more prisons then, it already has the highest per capita prison population in the world (higher than the USSSR under Stalin).


Fri, 04/27/2012 - 23:05 | 2381684 ekm
ekm's picture

Stupid idiots. Nobody knew about QE before the first QE was announced. Now all wall street maniacs are experts of QE.

No freaking QE coming, otherwise americans will all end up with food stamps, nobody excluded.

No more Cash Cocaine shots for them. I don't even think they can get a Cash Marijuana version until after Nov elections.

I consider BAC as the barometer of the market setup by Fed and Primary Dealers. Now here this: Today BAC had only 92 millions shares traded at 4pm. Average is 400 million. It seems that primary dealers are running out of money. As I said, no more Cash Cocaine for sure, but even Cash Marijuana not secure at all.

Fri, 04/27/2012 - 23:07 | 2381686 walcott
walcott's picture




What a joke the whole thing. It's complete bullshit has been for 40 years at least.

Elastic money supply. Poof there it is!

As Robert Kiyosaki demonstrates below

Fri, 04/27/2012 - 23:20 | 2381702 gwar5
gwar5's picture

Yes, I definitely get the feeling the FED is holding off QE like a little kid squirming around, trying to hold his water. They know their numbers are all lies and what is coming.  It just says to me that they are more concerned about re-electing Obama than they are about gasoline at .0036 of an ounce of gold -- or, $6 USD.


Fri, 04/27/2012 - 23:29 | 2381707 streetcrawler
streetcrawler's picture

OT, your average zero hedge reader:

Fri, 04/27/2012 - 23:48 | 2381727 BlueCollaredOne
BlueCollaredOne's picture

Fuck you.

So he's a prepper, he does not represent our this culture of liberty. If he is indeed guilty, he should be treated the same as a street thug who kills because of a shorted crack rock.

Sat, 04/28/2012 - 04:41 | 2381878 StychoKiller
StychoKiller's picture

I would recommend a friendly conversation with the local Sheriff.  Casually ask if (s)he has ever read: "The Creature From Jekyll Island, a Second Look at the Federal System",
5th Ed., G. Edward Griffin, ISBN:  978-0-912986-45-6

Find out WHO yer friends are (or are gonna be!)

Sat, 04/28/2012 - 13:54 | 2382422 Seorse Gorog fr...
Seorse Gorog from that Quantum Entanglement Fund. alright_.-'s picture

Nah. That bunker's too luxurious for me.

Fri, 04/27/2012 - 23:33 | 2381713 icm63
icm63's picture

.."Nobody in the media is talking about it, but the most important number today was 2.1% core PCE (personal consumption expenditures price index — Bernanke’s favorite measure of inflation). It is finally above 2% (spiked up from 1.9% to 2.1%). There is no way Bernanke can do QE-3 when core PCE is above 2% (QE3 is dead)."...

The above is the first post, ben wont care unless its 4%..Ben  wants inflation...

Sat, 04/28/2012 - 00:25 | 2381747 ISEEIT
ISEEIT's picture

All animals are equal, but some animals are more equal than others.

450 million rounds of hollow point .40 cal aside?

I'm still going with equal, but some animals are more equal than others.

Darwin was right about natural selection.

Wash, rinse, repeat.

I will now stop and blend into the crowd.

Good luck Satan or whatever you name yourself.

On a long enough timeline..........

You will lose.



Sat, 04/28/2012 - 00:41 | 2381758 adr
adr's picture

If the Euro goes down or the dollar strengthens, every corporation misses earnings. It really is as simple as that. Japan is screwed becuase no matter what they do they can't get back anywhere close to 100 yen per dollar. Their biggest market has lost them 30% in profit thanks to Bernanke. If the dollar strengthens by 10% the large US based multinationals lose millions in profit.

The US has 2/3rds of the world's lawyers and the greatest concentration of corporate directors/ledger chefs. They all depend on the Wall St Ponzi for their way of life. Without it they might actually need to work for a living. We can't have that now, can we?

Sat, 04/28/2012 - 01:04 | 2381772 tony bonn
tony bonn's picture

"...looks very much as if QE3/Fed-stimulus anticipations are behind the EUR relative strength recently. Indeed ...

it is time to pull one's head out of one's favorite orifice whichever one that may be.....the fed has been easing, printing, and debasing in front of your very faces....if not in the usa, then in europe, and if not europe, japan...etc etc etc world without end.

it takes many guises and disguises but it's the same bankster bailouts none the less....the fed could declare there would be no qe3 and it would not make a difference to their plans of easing, printing, and debasing....a rose by any other name...

Sat, 04/28/2012 - 01:39 | 2381800 Peter K
Peter K's picture

From the EUR/USD swaps, especially the short dates, it would appear that a positive move in the Spitalian debt complex is highly correlated with a rising EUR/USD swaps and EUR/USD by extension. It appears as if the Fed swap lines are the real driver of Euroland debt buying.

Sat, 04/28/2012 - 01:49 | 2381809 Peter K
Peter K's picture

After this week's EUR/USD px action, I'm beginning to wonder whether the real intent of the Fed is to keep the USD low rather than to just pump the equities. When listening to ObamaTools like Liseman on CNBC, it would appear that he and his fellow tools are fixated with 'manufacturing'. A good case in point is the GM promos that they constantly do. And the fixation with the manufacturing jobs in NFP's. This can't be a coincidence, and it would not surpise me if we start hearing about the American Wirschafstwunder that took place during the Obamadisasters time in office.

Sat, 04/28/2012 - 03:11 | 2381836 tim73
tim73's picture

Or it just might be Yanks just suck big time. I have heard this crap "it is not EUR attractiveness but more like USD unattractiveness" since parity talks 2002. Yanks were so fucking sure back then, "Euro cannot go much higher than 1.00, maybe 1.05 at best". Yeah, it went all the way up to 1.60!

Sat, 04/28/2012 - 04:05 | 2381862 dinastar2
dinastar2's picture

Euro is overvalued, and it's a big burden for the Eurozone economies.We in france hope that the France-Germany clash over the " stability pact " ( fiscal restraint limit of 3% of budget deficit ) will evolve into a new form of Currency with France-italy-Spain creating a southern euro and leaving germany choking with its Euro-mark.France+Italy are a 4000 billions euros economic-industrial concern ( 2200+ 1800 GNP) that can rivals Germany ( 3000 GNP) .Also France Italy Spain are the best tourism destinations in the world and a lower southern euro will only increase their natural edge. Look for the next french president Hollande going straight against the Merkel diktat.Then short the Euro 

Sat, 04/28/2012 - 04:29 | 2381875 whirlybird rules
whirlybird rules's picture


Sat, 04/28/2012 - 06:11 | 2381916 Pretorian
Pretorian's picture

High euro is another nail in the EU box , so US can become safeheaven again and finance its unsustainable appetite with 0% interest rate. But those fucking Germans keep exporting even with EUR trading on premium.And there merchendise is not toy Iphone but real heavy manufacturing. US have to try harder. 

Sat, 04/28/2012 - 06:14 | 2381917 onebir
onebir's picture

"Net, net I would argue that the new information over the last couple of weeks is the expectation that growth will be weak enough in the US to keep US policy very stimulative for a nice long time"

Shouldn't gold be a lot stronger on this?

Sat, 04/28/2012 - 07:31 | 2381951 JuicedGamma
JuicedGamma's picture

Pleeeez devalue, I so want to visit Italy and France next summer.

Sat, 04/28/2012 - 08:37 | 2382000 Ted Baker
Ted Baker's picture


Sat, 04/28/2012 - 08:38 | 2382001 Silversem
Silversem's picture

Pleeeez devalue, I am so long dollar against the euro. And it will also help my gold cfd position!!  

Sat, 04/28/2012 - 09:17 | 2382040 eddiebe
eddiebe's picture

Jim Willie thinks that China and Russia are supporting the Euro and want to start trading in Euros rather than dollars. Germany along with varied northern european countries aligning with them. France to lead the piigs to split off for a southern euro block monetary union. Rumors of an alternate 'swift'system are out there too. Can the US military keep everyone in line for evermore?

If creditable crack in the 'pax Americana' start to appear, I look to a Gold dinar, and the end to dollar hegemony and fiat in its current form to disappear.

 Whatever the future brings, one thing is sure. The commercial long position in Euros is enormous. I wouldnt bet against that.

Sun, 04/29/2012 - 05:38 | 2383334 Non Passaran
Non Passaran's picture

Why not bet against all currencies?
Anyone who has gold cannot possibly lose.

Sat, 04/28/2012 - 09:33 | 2382062 CryingBear
CryingBear's picture

the great Bernenke gave everyone holding bonds a warning during the press conference. that they should monitor their bond holdings in the case interest rates go up. wtf does everyone miss this?

Sat, 04/28/2012 - 12:04 | 2382288 dkonst
dkonst's picture

????? ????????? ????????? ??????????? ?? ????????

are allowed to leave comments in Russian?

Sat, 04/28/2012 - 12:04 | 2382289 dkonst
dkonst's picture

????? ????????? ????????? ??????????? ?? ????????

are allowed to leave comments in Russian?

Sat, 04/28/2012 - 14:01 | 2382431 I should be working
I should be working's picture

Maybe once every Euro has been sold short the currency can no longer go down?

Sat, 04/28/2012 - 20:53 | 2382915 flow5
flow5's picture

IF the FED doesn't know by now they are stupid.

Do NOT follow this link or you will be banned from the site!