WITHER NOW THE AUSTRALIAN DOLLAR?

For those of you who have followed my Ping Pong Pang Series, there is a report from Goldman Sachs this week which recommends taking long Euro and short Australian dollar positions. Please remember where you read this strategy first.

If you want long Euro positions, you can invest your dollars in Millhouse, Inc. PLC, listed on the Frankfurt Stock Exchange. If Goldman is anywhere near correct, you could possibly double your money in currency volatility alone.

The Australian media is not replete with people who understand what is happening in Europe, so please read the latest Economic Strategy from Michael Knox at RBS Morgans. Entitled “Reconstructing Europe’s Banks”, he reports the spreads in the Euribor credit market falling to their lowest since mid-2007 and concludes that “the EBA and ECB have brought the European banking crisis to an end”. Long Euro sounds good to me, especially v. the AUD, given falling terms of trade, declining commodity prices and rising Australian Federal and State government debt.