orca

ECB Move: An Opportunity To Trim International Exposure

After 10 years of f@#$ed up FED policy the ECB/Trichet is now actively pushing for Bernanke to do the right thing. We in Europe have been hearing about "strong $ policy" etc for ages now and enough is enough. This will become ugly, with either the FED jacking up rates (not likely) or the USD falling rapidly, combined with a commodity price explosion. In Europe we have much more leeway and although crude at $200 will hurt, it will destroy the American economy. And then, finally, you will still be forced to jack up rates, with the EUR/USD at 1,85.
Something else, though related, remember the talk at $60-80 that the Iran-scare was worth at least $20 and that we could spike to $100? Well here we are at $140 and Iran is laughing their ass off. You can thank Bush for "protecting" the US interest in that regard.
The thing with both problems (USD, crude) is that finally you will be forced to do the right thing, but it will needlessly hurt much more then than now. Apparently your leaders don't seem to have any capacity for leading in the right direction, explaining their decisions and sticking to them. Paul Volcker is called for, that's who.
As a European who loves the USA I am completely sick of that spinelessness and wholeheartedly support the ECB, because I am convinced it will be the right decision for the long run. In the meantime we reach for the barfbucket the moment Paulson, Bernanke, Cheney or Bush come on stage. And no, this is not about Iraq, that's another story altogether, this is about cowardice under fire. Boy am I mad. Time now for a cool beer in the sun, tomorrow we have to be relaxed for trading.