I’ll open today by saying that I don’t know if the euro will rise or fall against the dollar over the next two years. And neither does anyone else. Global currency markets are vast and complex and driven by trader sentiment and economic growth and interest rates and unpredictable crises and lots of other influences.
But, of course, that doesn’t stop investors and pundits from trying to predict them, or from having opinions — and they’re strong opinions sometimes, and well-backed by evidence, and they sound compelling and true. Just like the predictions that the US dollar would collapse four years ago sounded compelling and obviously true to many people (the dollar, in case you didn’t notice, has been incredibly strong for years despite the perceived overabundance of liquidity from the Fed, lapping essentially all other major currencies… and helping to keep our inflation rates and commodity costs low, among other things).
So that’s the intro from me — I share that just to remind you that Larry Edelson’s predictions about this next “supercycle” move in the Euro, though they sound compelling and evidence-based, are not necessarily going to come true. We all have a tendency to believe logical arguments, that doesn’t mean the cleanest logic wins in the end when you’re talking about the real world. It doesn’t even mean that people who were right about the strong dollar a few years ago (I wasn’t one of them, to be clear) will be right about what happens in the next few years.
But lots of folks are asking, so what is Edelson’s prediction… and how does he suggest that you can play this prediction to make some money? He drops some hints as he’s teasing us about his money-making idea in the latest ads for his Supercycle Trader ($5,794 for five years in the current “sale”), so let’s see what the Thinkolator can help to extrapolate from the marketing ooze… we’ll start with a little excerpt from Mr. Edelson to get you in the mood…
“I’ve been trying to prepare you for this for many months now.
“I’ve told you repeatedly that the euro currency would be one of the first victims of the supercycle that formed in October.
“I told you that the toxic brew of massive, unpayable debts, a weakening economy and soaring government costs due to the refugee crisis would drive the EU to its knees.
“I’ve begged you, even pleaded with you to invest in things that soar when the euro sinks.
“Now, as if all the crises converging on Europe aren’t enough, the International Monetary Fund itself is pulling the rug out from under the euro.”
That’s a reference to the IMF “certifying” the Chinese Yuan as a reserve currency, and including it in the Special Drawing Rights (SDR) basket starting next Fall, which is indeed happening — and though many folks have been wringing their hands and fearmongering about what it means for the dollar, there’s no particular reason for it to impact the dollar in a big way — the US dollar’s (dominant) share of the reserve basket stays the same, the Yuan is mostly taking away from the Euro… and the SDR i