Weakness Is Strength – EUR
There is strength in weakness and the EUR is soaring against the USD even as and the DAX is crashing in a pretty double dome formation.
Even as Soros proclaims 25 years of stagnation for Europe as Euro-Zone industrial output fell again, for the second straight month, underlining a fragile economic recovery, the EUR/USD broke a 2 year high ! which the fabulous US Non Farm payroll numbers last Friday could not dent its formidable run.
When we have Russian tanks at the border of Ukraine; Belarus on Russia’s side, Poland supporting the US; Turkey on the brink of crisis; all this amidst the slowing growth expected in Japan and China.
All it says is that every report we have read about EUR weakness have been too effective in creating an imbalance and the world has woken up to EUR as a safe haven as periphery countries wise up their act and Spain rolls out the red carpet for Chinese millionaires as Canada cancels their visas. http://www.scmp.com/property/international/article/1435055/canada-closes-its-door-spain-puts-out-welcome-mat
Even New Zealand is taking as many well heeled Chinese as they can which makes us wonder if there is anything of value left in China ? http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11215331&ref=rss
And as we rally towards 1.4050 on a defiant beat, the silence grows as strategists and advisors run out of reasons that will not affect their credibility. Is it because printing money and keep rates low is good because asset prices will continue to soar, like in the case of Irish real estate ? Or slow growth is good because rates will remain low ? Or that Ukraine will be an asset of as a vassal state to Germany ?
It is almost as if they are waiting with bated breaths for an inevitable crash to say, I told you so.