Short USD, Short EUR, But Buy Gold, Equities, Cigs, and Whiskey
FRANKFURT - I've proven that even a fool can make a lot of money in the market. I've also proven that "a foole and his money is soone parted."
This morning, I was sitting outside of a café on Berger Straße, sipping on a latte and pretending my pen was a cigarette. I watched high-end branded mothers push past with homunculi in thousand euro baby carriages; I saw hipsters and bald men, summer-kissed girls and women, and everybody appeared to have a sunny disposition save I.
I was thinking, Who was going to save me and my money? Wasn't anyone else worried about Greek Bailout Part I, Part II, ad infinitum? Didn't any of them see that Portugal, Ireland, Italy, and Spain were already standing in line? That there was a contest between the ECB and the Fed to see which could pump out the most paper?
Perhaps I wasn't enjoying the sunshine because I made the mistake of viewing a few hours of C-SPAN's coverage of The Debt Ceiling the day before. It was as if reverse-evolution was at work: congresspersons have near the same intelligence as an amoeba. And their grip on reality is equal to that of a teenager who has swallowed a tab of acid.
The Debt Ceiling was a farce because everybody knew what the outcome was going to be. The only solution to the economic problems in the US and Europe is to keep printing. It is a race to the bottom between the US dollar and the euro, and we may see a short-term bounce in the US dollar because, as The Renewable Man says, "When you print, your currency invariable goes up short term."
I am not interested in playing the US dollar, but an investors wishing to go long the U.S. dollar can buy PowerShares DB USD Index Bullish (NYSE: UUP). To short the euro, investors can buy the 2x leveraged Market Vectors Double Short Euro ETN (NYSE: DRR) or the 2x leveraged ProShares UltraShort Euro (NYSE: EUO).
I believe I will use a strengthening US dollar to buy some real assets with my FRNs, such as gold, cigarettes, and whiskey. If TSHTF, I'm sure I can trade a cig or a shot for a meal.
It might seem odd that I am contemplating going into equities after this current downturn, but it is not, if you consider that unlimited paper has to go somewhere. Don't forget, Helicopter Ben's QE3 is also coming this month. There is nothing to be gained in government bonds (miniscule interest and then, of a sudden, they will die), so paper will move to equities to keep pace with inflation. This strategy works if TS does not HTF and the gains, in real terms, will likely not amount to much, but after buying one ton of gold, there is only so much tobacco and whiskey a man can store.
Trusting paper holds for a few more years, you can play gold by picking up SPDR Gold Shares (NYSE: GLD). You might also want to look at the Market Vectors Gold Miners ETF (NYSE: GDX) and the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ).
Investors who want to bet the market will rise, can buy SPDR S&P 500 (NYSE: SPY) or Rydex 2x S&P 500 ETF (NYSE: RSU) which seeks to correspond to twice (200%) the inverse of the daily performance of the S&P 500 Index. Another bullish play could be ProShares Ultra QQQ (NYSE: QLD), which seeks to return twice the daily performance of the NASDAQ-100 Index.
I will never look at C-SPAN again. That is more depressing than a depression.
If you have any tips for me or want to send me gold, contact me at email@example.com.
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