Betting on Euros
Ben's Money and Metals discussions have heated up. Below was my recent input.
I'm in the minority here with big bets on the Euro (however, my biggest bets are on CAD and CanRoys). I estimate my Euro bets are twice as big as my PM bets.
Here are my views on the Euro:
Most of us agree that the USD will faulter at some point. Serious PM bugs want all unbacked paper currencies to fail, and logic might conclude that is what should happen.
I believe the marketplace is setting the stage for the Euro to be the next world's [paper] reserve. Pre-war Iraq attempted to switch to Petroeuros. Syria switched their savings to Euros. The Middle East in general has large European accounts. Iran is trying to switch to Oil Bourse (which will result in higher demand for the Euro). Venezula is proposing Petroeuros too. I believe this is a beginning of a shift not to be taken lightly.
People might argue that the fundamentals of the Euro are worse than the USD, but right now the psychology of world markets point to a fear of USD. We have all witnessed psychology overriding most market factors.
When USD crashes, perhaps it will take the other major currencies with it. But what damage does that really do? Only then emerging market currencies will be worth more. No one would consider that a crash. I believe if we have a currency crash, there will be one faulter or different tiers. USD would be it or faulter more than others and so I shall win my bet.
If I'm wrong and USD prevails over CAD, EUR, and JPY, then I should have just sticked to T-Bills.
Russia is on the right track for trading in gold. I can understand other countries hesitating to do this because of the high volatility of PMs (not to mention oil itself).
I'm in the minority here with big bets on the Euro (however, my biggest bets are on CAD and CanRoys). I estimate my Euro bets are twice as big as my PM bets.
Here are my views on the Euro:
Most of us agree that the USD will faulter at some point. Serious PM bugs want all unbacked paper currencies to fail, and logic might conclude that is what should happen.
I believe the marketplace is setting the stage for the Euro to be the next world's [paper] reserve. Pre-war Iraq attempted to switch to Petroeuros. Syria switched their savings to Euros. The Middle East in general has large European accounts. Iran is trying to switch to Oil Bourse (which will result in higher demand for the Euro). Venezula is proposing Petroeuros too. I believe this is a beginning of a shift not to be taken lightly.
People might argue that the fundamentals of the Euro are worse than the USD, but right now the psychology of world markets point to a fear of USD. We have all witnessed psychology overriding most market factors.
When USD crashes, perhaps it will take the other major currencies with it. But what damage does that really do? Only then emerging market currencies will be worth more. No one would consider that a crash. I believe if we have a currency crash, there will be one faulter or different tiers. USD would be it or faulter more than others and so I shall win my bet.
If I'm wrong and USD prevails over CAD, EUR, and JPY, then I should have just sticked to T-Bills.
Russia is on the right track for trading in gold. I can understand other countries hesitating to do this because of the high volatility of PMs (not to mention oil itself).
posted by Out at the peak at
11:28 AM
|
5 comments
