Playing for Japanese yen weakness is one of our favorite long-term trades at Black Swan Capital; besides being short the euro against any other currency with a pulse. The yen has started to weaken against the pack—finally. But there are two reasons why we believe this game is only just getting under way.
Real recovery may mean gold is due for a little dirt nap:
1) Other real (physical) asset investments in the real economy (land, plant, equipment, etc.), that appear relatively cheap at the beginning of recovery thanks to the impact of recession, compete with gold as an investment class once again.
2) If we run on the assumption that silver is more an industrial metal than gold, during recovery the relative price/demand for silver rises, thus the gold/silver ratio declines.
Well, if true, stocks did it again. They forecasted a recovery. The optimists have been right; piling into stocks with confidence as they climbed the proverbial Wall of Worry. The worry warts (guilty as charged) look like they were wrong; especially if the China credit bubble concerns prove untrue.
But, vigilance remains given the potential for rising protectionism as China-US relations continue to fray and Euro Monetary Union unraveling potential. Either of these events clobbers commodity currencies. And speaking of commodity currencies…
BUDAPEST, March 31 (Reuters) - Hungary posted a current account surplus of 456 million euros in the last quarter of 2009 and also had an annual surplus last year for the first time since it started publishing data in 1995.
For the whole of 2009 the current account was in surplus by 186 million euros, compared with a deficit of 7.504 billion euros in 2008, the National Bank of Hungary said on Wednesday.
Friday was a good day for the euro. But it wasn’t enough to eke out a gain on the week. And that could be very telling.
Have a look ...
