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Welcome to the "Wolf Creek Pass" School of Monetary Policy

I don’t know if you folks remember that hit ditty: a humorous tune about two truckers attempting to manhandle an out-of-control 1948 Peterbilt down the “other side” of Wolf Creek Pass – a death-taunting section of U.S. Highway 160 where the elevation drops a hefty 5,000 feet in a relatively short distance.

The song’s two characters – a truck driver named Earl and his brother, who’s his partner as well as the song’s narrator – are taking a flatbed load of chickens on a speedy trip down this winding, two-lane Colorado highway. After the narrator gives Earl the above-mentioned warning, the ancient semi’s brakes fail.

From there on down, the narrator tells us that the brothers’ trip “just wasn’t real pretty.” The truck careened around hairpins and switchbacks, and then raced at an uncontrolled 110 mph toward a tunnel with “clearance to the 12-foot line” – with chicken crates sadly “stacked to 13-9.”

The drivers and the runaway Peterbilt “went down and around and around and down ’til we run outta ground at the edge of town… and bashed into the side of the feed store – in downtown Pagosa Springs.”

Believe it or not, I started thinking about this funny old country tune the other night – right after I’d read a piece about QE3 and the U.S. Federal Reserve.

As zany as it first sounds, the parallels are striking.

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    The news of rate cuts from the European Central Bank (ECB) is giving traders more reason to short the euro.

    This looks like a further step toward large-scale quantitative easing in the Eurozone, and the euro is likely to see devaluation at the hands of inflationary cues from the ECB.

    Here’s how you should play this currency…
  • The Biggest Takeaway from the European Central Bank Rate Cut? Short the Euro short the euro

    The news of rate cuts from the European Central Bank (ECB) is giving traders more reason to short the euro.

    This looks like a further step toward large-scale quantitative easing in the Eurozone, and the euro is likely to see devaluation at the hands of inflationary cues from the ECB.

    Here’s how you should play this currency…
  • Why to Short the Euro in 2014 short the euro

    The euro is readying for a substantial devaluation at the hands of oncoming monetary and fiscal stimulus.

    But don't think the euro bears haven't already thought of that, as the currency has lost 5.3% since its peaks in May.

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  • Is George Soros About to Short the British Pound Again? freeimage-5189042

    Shorting the yen has earned George Soros more than $1 billion in profits since November.

    Now Soros has set his sights on the second-most-shorted currency in the world - the British pound.

    And he may have company, as the Financial Times reports: Along with Soros Fund Management, Tudor Investment Corp., Caxton Associates and Moore Capital - some of the best global macro traders - "see similarities in UK's predicament to that of Japan" and are interested in shorting the pound.

    This adds to worries about the pound, which has already fallen 5% this year. And with exports falling, productivity low, and gross domestic product shrinking last quarter, Britain's economic outlook is foggy at best.

    "There could be a dramatic weakening of the pound this year," one of the world's top macro hedge fund managers, who declined to be named because he does not want his firm's positions becoming public, told the FT.

    For Britain's sake, let's hope that weakening doesn't lead to another "Black Wednesday," Sept. 16, 1992 - the day George Soros "broke" the Bank of England.

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