Sunday 19 June 2022

Shorting Germany?

Anon, BTL previous post - "any investment suggestions?" ... 

Well we can't and don't do financial advice or recommendations on this blog, so DYODD etc.

But here's something from Capx which is a clear enough recommendation from somebody else: buy dollars and Italy, sell Germany! 

Blast from the past: 2010
The rationale is basically that the Germans are about to cop the bill for the Mediterranean economies.  Hmmm - that's a bit like nuclear fusion, people have been predicting it for a long time.  But maybe now's the hour.  You can also chuck into the pot Germany at long last being called out / caught out as being the mainstay of the Russian economy (both as importer of stuff and exporter of tech), which may not be allowed to last much longer.  What other game do they have to play that could be equally lucrative?  Well, China, of course as regards the tech exports - but the USA won't let 'em have a free run at that, even if they've (the Germans) been surreptitiously sleeving, not to say laundering for Russia these 8 years.

Personally I went 'buy USD' when the whole current thing kicked off which I date to Feb 2021 (when I first reported far-east gas prices going through the roof here) - a general rule of mine over the decades.  He who underestimates the latent strength of the USA is often doomed to a big disappointment.  Saved me in the late '00's when I shorted GBP @ 2.10 in '07 (hat-tip CU, I might add: I can even tell you which pub we were in).  We tracked its glidepath down on the blog, all through the financial crisis.

Gold hasn't been quite as effective this time around.

How much further down can £ go?  Well 1.05 (1982) is the all-time low (That's what it says when I looked it up just now.  From memory, it actually went a bit lower that year).  The psychological floor represented by 1.00 is apparently quite sturdy.  That's not a prediction, by the way.

ND

13 comments:

dearieme said...

Some time ago a young thing in the family was complaining about interest rates and her fear of inflation. (A fear generated by me, I suspect.) I recommended she try USD, SGD, and CHF. And, of course, gold.

This was based partly on memory of how happy we were, decades ago, to have a stash of Deutschmarks. (Actual notes, hidden in a Secret Place.)

andrew said...

By a process of incompetance I have ended up with (in order of size )
Global not europe unit trust
US LMT
Mixed us via inv trust
UK b2b aim supplying uk
UK b2b aim supplying rotw
UK other aim

Uk other aim has completely catered.
I am 30% off my all time high.

Not uk / europe makes sense.
As pointed out, the eu has a lot of rebalancing to do and I am sure they will not be kind to ex members who seem to specialize in p****** them off.


andrew said...

As a positive Japan?

Anonymous said...

"Germany at long last being called out / caught out as being the mainstay of the Russian economy (both as importer of stuff and exporter of tech)"

I don't see what the problem was with that, and if NS2 had gone ahead it would have been good for the whole of Northern Europe.

But no, the US just had to push for Ukraine in NATO, precisely BECAUSE they knew it was a red line for Russia. But I still can't quite see what's in it for the US.

a) push/bribe Ukraine towards NATO in the full knowledge that Russia wouldn't have it, get your desired war.

b) shut down NS2 and stop oil/gas/fertiliser/wheat/neon/rare matals imports to Europe.

c) ???

d) Profit!


Now China and India will be "the mainstay of the Russian economy" aka provider of cheap energy and other desirable resources. And this is good for Europe how exactly?

DJK said...

I've seen various explanations as to why the US has been trying to provoke Russia into attacking Ukraine, none of which really make sense. (We can dismiss any talk about protecting democracy.)

And now we have Lithuania breaking its treaty requirement to give Russia unlimited rail access to Kalingrad. As anon says, what would have been so bad about standing down the Nato exercises and just enjoying cheap gas?

Elby the Beserk said...

DJK said...
I've seen various explanations as to why the US has been trying to provoke Russia into attacking Ukraine, none of which really make sense.

4:06 pm
=========================

Biden doesn't make sense. Ever.

That's why they are doing what they are doing.

Anonymous said...

"And now we have Lithuania breaking its treaty requirement to give Russia unlimited rail access to Kalingrad. "

I can't believe they would have done this without encouragement and promises from Washington. They must want to escalate. It looks as if one war isn't enough for the US, only this will be with "a NATO ally". You'll recall the long history of UK-Lithuanian alliance.

What I can't get over is how the Septics are persuading people to take these amazing risks. You'd think Ukraine would be a warning. Unless, like Zelinsky and half the Ukrainian cabinet, you have bolt-holes elsewhere.

PS - I wonder who exactly IS in charge of US foreign policy? It's certainly not Biden.

Don Cox said...

Isn't the Secretary of State in charge of US foreign policy ?

A President's powers are quite limited, deliberately.

Don Cox

BlokeInBrum said...

Anon @ 5:07 pm

"I wonder who exactly IS in charge of US foreign policy?"

Maybe start with Victoria Nuland and her husband Robert Kagan.

Then jump down the rabbit hole of the National Endowment for Democracy (NED).

Just be careful it doesn't turn you into a conspiricy theorist!

dearieme said...

"A President's powers are quite limited, deliberately."

So saith the Holy Constitution. But because Congress tries to evade many of its responsibilities the President accumulates unconstitutional powers. Remember Obama's boast that he could rule with a pen and a phone? Look at all the wars that Presidents start even though declaring war is reserved to Congress.

Also because Congress tries to evade many of its responsibilities you end up with the Supreme Court legislating.

There are good arguments for a "written constitution" but I don't think the American experience is one. Sad, really: the US Constitution is a fine piece of work (especially compared to the dire Declaration of Independence).

Anonymous said...

"Maybe start with Victoria Nuland and her husband Robert Kagan."

There's a neat graphic on the Kagan family interconnections, his brother Fred is married to Kimberley Kagan, who runs the "Institute For The Study Of War", a neocon propaganda outfit much in demand for snazzy graphics depicting the war in Ukraine.

https://i.postimg.cc/QNm1Q8Wg/neocon.jpg

Caeser Hēméra said...

With regard to Lithuania, looks like a response to the draft bill in Russia seeking to declare its independence as illegal.

Russia isn't being aggressed against, it's being parented.

Elby the Beserk said...

dearieme said...
"A President's powers are quite limited, deliberately."
======================================================

Hello, Executive Order...