I said quite awhile ago “short oil, short the Euro, go long the Dollar, short equities”.
Three out of four is not bad! As a matter of fact, if this was baseball, a 75% success ratio or .750 batting average would put me into the Hall of Fame and ahead of the legendary Ted Williams who only hit .400. OK Hall of Famer, what now? (Oh! By the way, the jury is still out on shorting equities).
It would seem the next few weeks will give us an answer to all of the above.
IF Janet goes through with her Keynesian directive, hell bent for leather, self immolation with an interest rate hike, the dollar will continue to show even more strength than it has. The long dollar works even better.
IF Mario continues his “whatever it takes” and goes even more negative on the interest rate scale and implements another round of Quantitative Easing the Euro will quickly sink below parity. The shorts get even richer.
IF the Saudi’s look across the water and see oil tankers being filled with Iranian oil (thank you Barack and the US Congress) their market share over production cutback will continue. Oil will quickly sink to $35 a barrel (as predicted by the Saudi Oil Minister several months ago) and the pump price will hit $1.75.
That’s a lot of Ifs in a relatively short period of time, however, IF you step back and view it all from a deflationary perspective and you add in old hatreds which will never go away the IF is taken out of the equation.
One tenth of one percent inflation dictates Mario going even more negative.
Two hundred thousand people standing on a street corner begging for money counts as a job which dictates Janet going more positive.
The Sunni Shiite hatred dictates that the Saudi’s keep everything status quo.
It all seems so logical and easy to understand which is why just when you think you’ve got it all figured out something or someone throws you a curve ball. Of course, if you can hit the curve ball, apparently most hedge funds can’t, then you too will be in the Hall of Fame. Of course, the curve ball of all of this is the word IF.
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