VVV

Burgernomics: Profiting from the Big Mac Index

As a follow up to the ETF currency piece above, Ryder has just launched a Japanese currency ETF (FXY). This is the best way to profit from the decline of the yen- (on the short side, if you're a trend follower) or from its inevitable rebound (on the long side, if you prefer fundamental analysis.)

I have several issues with the comment on the weakness of the dollar. First, it's too much the conventional wisdom. Always a bad sign. Second, purchasing power parity shows that virtually all other currencies are over valued by about 20% versus the dollar. The U.S. is getting very, very cheap by international standards. That cannot last forever. Third, neither the U.S. economy or the dollar in nearly as parlous a state as headlines would lead you to believe. It never is. Finally there are some (sadly) very abstruse arguments made for the dollars current state by Ron McKinnon at Stanford on the page often WSJ and blog entries in the FT. I parsed a small handful in a Global Guru piece U wrote back in December. www.theglobalguru.com/...;offer=GURU001