The Euro in One Sentence

Paul Krugman said it better than I could, and while I'm not generally a fan of Krugman, it's worth noting:

What has happened, it turns out, is that by going on the euro, Spain and Italy in effect reduced themselves to the status of third-world countries that have to borrow in someone else’s currency, with all the loss of flexibility that implies. (H.T.

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Silver

A lot of people are upset that they sold silver too early. I get it. It's surging, all the blogs are talking about it taking out the Hunt brother's high of $50 and shooting higher, and there's little faith in global fiat currencies, so the hard stuff is getting bid up.Viewing the remainder of this article requires a Subscription

Right and wrong…

...or yen and euro. Long time readers know that I have maintained short exposure to both the yen and euro starting in November of 2009 - pretty long by currency traders perspective.Viewing the remainder of this article requires a Subscription

Gold update

It's certainly making it's way across the different newsletters that gold and silver at at multi-year or all-time highs, but I don't see as much about it in the popular press...yet.Viewing the remainder of this article requires a Subscription

Currencies dominate

For those with long enough memories, the current currency wagging the markets is reminscent of 1987. There, I said it. Portugal gets downgraded. Ireland is gonna haircut every debt holder. Etc.Viewing the remainder of this article requires a Subscription

The dollar

The dollar is once again the most hated reserve currency in the world. European peripherals are breaking down, with bonds hitting all-time high yields in Portugal, Ireland, Spain and soon others. The yen is getting printed so fast we should have bought printing presses in anticipation.Viewing the remainder of this article requires a Subscription

I don’t want to write about gold

I don't want to write about gold and silver, but I just can't help myself. Gold is at all-time highs and silver is at all-time ex-Hunt brothers highs.Viewing the remainder of this article requires a Subscription

Euro holding up, all considering

Considering the fact that Portugal just lost it's government after its Parliament rejected a deficit-cutting plan. What happens next? Well, some combo of Germany, IMF, US, and China comes to the rescue.Viewing the remainder of this article requires a Subscription

Always looking for the ugly duckling

And right now, there's one asset that looks pretty ugly... What if I told you there was an asset that was sitting at 52-week lows. It has some negative fundamentals, and a few relative positives, but no foreseeable absolute positives.Viewing the remainder of this article requires a Subscription

Which is the risky currency?

What if the Swiss Franc becomes the risky asset? Crazy? Perhaps, but stick with me for a moment. Readers know that I don't like the euro long term. Structural problems between fiscal and monetary policy, rich vs. poor, etc. all make it an unviable alternative for the long term.Viewing the remainder of this article requires a Subscription

Japan down 14%

Yes, you read that correctly. Japanese stock markets are down 14% and have in 2 days experience more than half a trillion dollars in wealth destruction. There are separate conversations to be had... First, there is the human tragedy. On top of losing homes, jobs, schools, etc.Viewing the remainder of this article requires a Subscription

Asia is the real story

The world is worried about oil, and rightfully so. The Middle East is in turmoil - I get it.Viewing the remainder of this article requires a Subscription

Nothing to add

The US markets are closed for Presidents Day - and what a day it is. There are endless stories going around about Qaddafi escaping to Venezuela with gold and what-not in tow. I don't know. I have no good sources for that kind of information.Viewing the remainder of this article requires a Subscription

Have we seen the top in Yen?

I'll admit that I'm biased. Japan's macro-economic picture has looked bleak for years, and in late 2009, after months of researching, I determined that I wouldn't be able to find the absolute top, so I initiated a short position in the yen.Viewing the remainder of this article requires a Subscription

Short euro position

I haven’t touched this position since March 2009! How’s that for taking a position. We sold the euro well at around 1.49-1.50. I’ve been bearish on it the whole time and continue to only get more worried about the structure. I saw the position work in my favor and then come back, with talk of the euro regaining reserve currency status abounding. Today, for the first time since 2009, I changed my position: I shorted the euro, again, adding exposure (or initiating it for newer clients).I’m not big on trading in and out, so positions are always limited and within our risk parameters to allow us to hold on through a lot of volatility.

Relevant ETFs: FXE, EUO