Element of Surprise Now Gone But Opportunity Still Abounds....
The ongoing theme of the US Dollar rise has been one that I have been touting for a few months now. With the advent of last weeks big move this view is no longer a surprise as risk off becomes the main theme for a brief period of time.
That the Eurozone is in a deflationary spiral is now seemingly gathering momentum with the talking heads. What should strike you as unusual is "how this area of the world was ever looked on as stable". In good times the Eurozone grows at a blistering 2.7 to 3.0% per year and when you have bad times which seems to be the most prevalent theme it is downright anemic. Kind of makes you want to run out and buy Euro's doesn't it?
The point of all this is that you can get bogged down with the trivialities of an area when in essence the main thing you have to determine is, "Where is cash flow headed". It really is that simple folks.
The emerging markets are crashing not as a result of investor disfavor but rather a return of cheap US Dollars for carry trades to the US. Conversely money is now leaving the Eurozone as investors seek the safety and returns of being invested in one of the most dynamic economies of the world. Which of course is the USA.
China may get the nod in manufacturing over the US but not in self-sufficiency. The USA does not only feed itself but it feeds most of the world. Especially the old world which is Europe and Asia.
North America still has a staggering amount of opportunity available to it. It has lots of resources and it has lots of skilled labor. These little set backs in the world only serve to strengthen our resolve to get better and it will be the same in the USA.
All you need to know is that money is flowing freely back to the US. It is coming from all over the world and so some currencies are going to take a beating. Like the EURO and the Pound for example. The Dollar will continue to strengthen for the forseeable future.
I still see great opportunity in the USD/CHF, GBP/USD and EUR/USD. I also see good opportunity in shorting the EUR/TKY, and the EUR/CAD. If you wish you can look at the EUR/AUD too.
I see the EURO losing ground against most major currencies as if there is any recovery going to be staged at all in the Eurozone the EURO is going to have to be substantially weaker. I will be shorting the EUR.CAD and EUR/TKY this week. Take into account the volatility and go small.
That the Eurozone is in a deflationary spiral is now seemingly gathering momentum with the talking heads. What should strike you as unusual is "how this area of the world was ever looked on as stable". In good times the Eurozone grows at a blistering 2.7 to 3.0% per year and when you have bad times which seems to be the most prevalent theme it is downright anemic. Kind of makes you want to run out and buy Euro's doesn't it?
The point of all this is that you can get bogged down with the trivialities of an area when in essence the main thing you have to determine is, "Where is cash flow headed". It really is that simple folks.
The emerging markets are crashing not as a result of investor disfavor but rather a return of cheap US Dollars for carry trades to the US. Conversely money is now leaving the Eurozone as investors seek the safety and returns of being invested in one of the most dynamic economies of the world. Which of course is the USA.
China may get the nod in manufacturing over the US but not in self-sufficiency. The USA does not only feed itself but it feeds most of the world. Especially the old world which is Europe and Asia.
North America still has a staggering amount of opportunity available to it. It has lots of resources and it has lots of skilled labor. These little set backs in the world only serve to strengthen our resolve to get better and it will be the same in the USA.
All you need to know is that money is flowing freely back to the US. It is coming from all over the world and so some currencies are going to take a beating. Like the EURO and the Pound for example. The Dollar will continue to strengthen for the forseeable future.
I still see great opportunity in the USD/CHF, GBP/USD and EUR/USD. I also see good opportunity in shorting the EUR/TKY, and the EUR/CAD. If you wish you can look at the EUR/AUD too.
I see the EURO losing ground against most major currencies as if there is any recovery going to be staged at all in the Eurozone the EURO is going to have to be substantially weaker. I will be shorting the EUR.CAD and EUR/TKY this week. Take into account the volatility and go small.
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