Monday, September 23, 2013

These Are the Currencies I am Buying

According to Currency Wars: The Making of the Next Global Crisis author Jim Rickards, traders (not investors) should short the British pound. In his eyes, a currency crisis is coming, and the British pound is ‘in the eye of the storm” because the UK has sold most of its gold, and they are printing money endlessly. He believes the UK is using monetary policy to try to solve structural problems, which will ultimately fail.

On the US situation, Rickards believes the US has used all its dry powder combating the Great Recession of 2008. “The problem is, the last time the Fed printed 3 trillion dollars between 2008 and 2013 to patch it over. What are they going to do next time, print 6 trillion dollars? Their balance sheet is shot. The next time there’s going to be a liquidity crisis, the Fed won’t be able to print because they already did that.”

- Source, Market Sanity: