(3-17-15) To Save Global Economy
As mentioned in previous Al Martin Raw articles, every week now yet another central bank is joining the interest rate fray in the new race to the bottom.
Not only do we have a global currency race to the bottom, but now a global interest rate race to the bottom, wherein banks are falling all over themselves to cut rates in a desperate bid to provide some monetary stimulus.
The new money trade -- US Dollar/ Euro -- that all of us traders are piled on top of because like the oil trade, it’s a “guaranteed” short trade because, like Oil -- Euros have no place to go but down.
We consistently keep selling the Euros and covering them a day or two later. We have seen – since the European Central Bank (ECB) has formally begun their next QE (Quantitative Easing) program – which formally began last Monday - Euros have already fallen 600 basis points (a basis point being 1/100 of a percent) against the US Dollar.
This is happening because of the uncertainty about what ECB head Mario Draghi was going to do with this Quantitative Easing program which is now the 4th Quantitative Easing program for Europe.