Re: WHEN A SQUARE BETS $0.01 WITH A SHARP ON AMERICA'S ECONOMIC DIRECTION...
Good luck jumping on the bandwagon as late as you are. The world spots a bargain in US property and companies right now, tells me all I need to know. This is just a cyclical downturn as there always are in currencies. Its just exacerbated by the amount of leverage around for these bets, but the credit crunch is going to start hammering away at these bets and then the investors driving this daily run up of value are going to say "oh shit!"
Think about it, European taxes are sky high, labor laws still suck balls, there are massive problems in translating products and cultures across the EU's interior borders, and worse of all they are taking on country's now with lower productivity and per capita GDPs than Mexico as their own. You tell me how all that is more attractive and profitable than doing business in the US. It isn't and it never will be. Europeans for the most part accept that as part and parcel of European life. For someone to believe the Euro is going to continue to rise in spite of the poor playing field for business there over the US is just plain and simple senseless.
In the end that is what currencies reflect. Business conditions and playing field. If you really think China can continue to have built in advantages then go right ahead and believe the Yuan will endlessly strengthen. But if you want to protect yourself from making bad economic bets think about what currencies really represent: legal tender to be used in one particular economy. In other words a Russian may hold dollars and may use them to buy German goods, but the inherent value of dollars will always be dependent upon the US economy alone.
