Anko, One of the best kept secrets around is that the European economy is far outperforming the US economy since mid-1998. We have to remember that the Europeans do not compute their GDP growth numbers using phony chained dollar sales for computers, as Americans and only Americans do.
However, that being said, it has been to the benefit of Europe to let the Euro slide and sell more Mercedes and Armani suits to debt-ridden Americans. There is certainly no outcry to point out the true state of affairs. Eventually, the accumulation of ubiquitous dollars by foreigners will cause a reversal of the Euro's slide similar to the Yen's recovery in the past two years, but that could be accompanied by a disastrous global economy.
Right now, policy makers on both sides of both oceans are co-opted into pushing the buck for all it is worth to keep the fragile global machine going. US bonds have been great investments for foreigners, ex the Japanese, despite higher interest rates. I think we are near the breaking point where the machinations of the govts will become undone by the traders who smell a rat. I am betting with call options and not with futures, as the risk of my timing being off is great. But the long term thrust is certain, IMHO. |
