Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Portfolio > ETFs

Why We Should Worry About Europe

By Staff Writer

X
Your article was successfully shared with the contacts you provided.

Europe is far away and some of the European countries over there are small and insignificant.

Why worry about what’s happening in Greece?

Do you remember the tremors Iceland’s near bankruptcy sent around the globe? It turns out that Iceland was an early warning — what happened in Iceland would soon thereafter be reality in the U.S. and Europe.

Greece could be the new Iceland. If it isn’t Greece, it might be Portugal, Italy, the United Kingdom or Dubai, there are plenty of contenders. For right now however, it’s been decided that Greece poses no problem. Wall Street applauds every attempt at another bailout.

The European Union (EU) and the International Monetary Fund (IMF) have just agreed to provide joint support. The discussed measures, however, will not make money available immediately but will act more as a safety net if Greece is not able to raise money on their own, which they have indicated they won’t be able to.

Today’s picture of Europe, with entire nations’ financial stability stumbling, is much different to just five months ago. Wasn’t it just in October ’09 that much of the world wanted to have the US dollar replaced as global reserve currency?

At that time, most everybody expected the euro the shot through the roof and the US dollar to be entirely devalued. This was when the ETF Profit Strategy Newsletter recommended that investors go long the US dollar – or the PowerShares DB US Dollar Bullish Index ETF (UUP) – and go short the euro.

Since then the greenback has staged a powerful 15 percent rally while the euro has fallen just as much. This is a huge move for currencies.

With Europe’s trouble, what is next for the euro and the US dollar? Will massive government spending devalue the buck? The ETF Profit Strategy Newsletter provides an out of the box forecast for the US dollar and the euro.

If there’s one thing we’ve learned since the post-2007 sub-prime meltdown, that very few saw coming: Things are never as they seem.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.