The Smartest Man Online

For years now, the Euro currency has been on a tear, killing the US dollar and most of the world’s other currencies along with it. If we look solely at the Euro/Dollar relationship, the past few years has not been that big of a surprise. The Dollar has huge debts hanging on its shoulders and external debt is mounting by the day to the tunes of billions of dollars thanks to Asian central banks. The printing press in Washington is increasing the supply of dollars every day, debasing and devaluing the currency, and inflation is being totally ignored by Mr. Bernanke & company, leading to lower interest rates, despite oil rising to $140/barrel. The Euro on the other hand, has strict requirements on balance of trade figures, and has been far more hawkish on inflation than its US counterparts. This one way relationship, however, has gone to such an extreme, that virtually everyone on the planet is bearish on the Dollar. While certainly the Euro is a better currency than the greenback, the US economy is still far more potent than the ticking time bomb in Western Europe. The Euro bubble has reached its climax, and will reverse course over the next 2-3 years in major way. (more…)