-------- Original Message --------
| Subject: | Most Over-Valued Currencies as Per the Latest Big-Mac Index |
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| Date: | Sat, 30 Jul 2011 13:55:18 -0700 |
| From: | Jas Jain |
Most Over-Valued Currencies as Per the Latest Big-Mac Index
http://www.economist.com/blogs/dailychart/2011/07/big-mac-index
NOTE: I have adjusted the prices based on the currency prices as of Friday's (07/29/11) Close
Norwegian Krone and Swiss franc are the most over valued currencies based on the cost of a Big-Mac during late July. The cost of the Big-Mac is 104% higher in these two countries, $8.24!, compared to the average price in the big metros in the US, $4.07. Sweden in #3.
There has been a heard mentality among the dollar and the US Treasury bears to move into these two currencies. Needless to say that Treasury bears like Jim Rogers have been taken to the cleaners (the dope has had to cover at a loss several times in the past and he is at a loss right now unless he has covered again at a loss; talk about irremediable dopes that refuse to acknowledge what they don't understand well enough to come to a sound conclusion). It is only a matter of time before the dollar bears like Peter Schiff that favor certain fiat currencies, like Krone and Swiss franc, over the US dollar, would also be taken to the cleaners. All in due course.
Trend followers always get caught when the trend invariably reverts to the mean. Swiss franc would lose 40-50% from the high based on having done so at least twice over the past 26 years. Currencies like British Pound, Euro (D-Mark before that), Yen and Swiss franc (the ones that I have followed over the years) always trade between two extremes. Right now Swiss franc is at the most extreme. For example, Swiss franc was $0.55 during late 2000 and now it is $1.27 (up 131%). It has gone from under valuation to severe over-valuation.
Most ordinary investors lose money in the currency market just as do in the Scam Market. One reason is that they are ignorant of the historical behavior of these markets. They invariably get sucked-in during the bull run, most of them towards the end of that run. What else is new?
The US dollar is under-valued against most currencies and significantly so against some that are a part of a crowded trade. Madness of the crowds?!
Jas
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2 comments:
Great post.
Why are you not posting anonymous comments?
Nobody seems to read the ads here (how we can make money) so there is little incentive to put much work into moderation.
Also, I'll only post comments that add to the discussion, are polite and don't contain links to other sites.
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