About Currency Currents

With Currency Currents, you can stay tuned-in to our current global-macro view and our analysis of key investment themes driving currency prices.

We consistently focus on the key asset classes responsible for the flow of global capital -- including equities, fixed income, commodities and, of course, currencies.

Nothing is off limits to us in this free-wheeling look at the markets. Some days you’ll receive ramblings on trading psychology, while other days we may take an academic approach in explaining esoteric economic issues. Ultimately we have one goal in mind: to help you get a handle on the key investment themes driving global capital flow. Because if you know where the money is going, it increases the probability that your position in the market will be a profitable one.

Who is Jack the Pipper?

Jack Crooks is Black Swan Capital LLC, President and Chief Trading Officer.

Jack is founder and president of Black Swan Capital LLC. He has also operated a discretionary money management firm specializing in global stock, bond, and currency asset management for retail clients. In addition, he was general partner in a firm specializing in currency futures and commodities trading. Neither firm is now in operation.

Prior to entering the investment arena, Jack worked in various corporate finance positions. He has written extensively on the subject of global currencies and international economics.

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Gold not shining lately...hmmm

Posted 09:58 12 January 2009

Key News

Crude oil fell below $40 in New York on concern production cuts by the Organization of Petroleum Exporting Countries will fail to counter a slump in demand. (Bloomberg)
Russia's ruble slid to the weakest level in almost six years against the dollar after the central bank devalued the currency for a second day as declining oil prices threaten to deepen the country's economic crisis. (Bloomberg)
China's economic growth may fall short of the government's 8 percent target for creating jobs and preventing social unrest in the world's most populous nation, two top officials said. (Bloomberg)
A South African court on Monday reinstated 16 counts of corruption against Jacob Zuma, leader of South Africa's ruling party, who is now likely to go into the election campaign with the charges hanging over him. (FT)

Key Reports (WSJ):
No reports due out today.

Quotable ( A bit long today...)

"No gold-digging for me... I take diamonds! We may be off the gold standard someday."

Mae West

FX Trading - Gold not shining lately...hmmm
Gold bugs call your office!

As gold goes so goes the dollar in the opposite direction? That is what we've been seeing lately. Today, gold is sharply lower at the moment and trading below its 200-day and 28-day moving averages. Notice the classic lower highs and lower lows on the chart...

We continue to believe the markdown in growth out of China is key to the future path of gold. With our agnostic gaze, we view gold primarily as a liquidity-driven risk appetite asset.

Whenever we say that, we are told gold is much more; it's a safe haven and a substitute for the ugly fiat currencies (we agree paper currencies are very ugly). But...

How much more stimulus is possible to pump out and cheapen paper currency the world over? How much closer can we get to all out war in the Middle East? How much more dangerous can the Pakistan-India on-going quagmire become? How much have the probabilities increased for social unrest in China and the potential it has to destabilize all kinds of stuff? We guess things could get much worse, no doubt. But yikes! This is nasty stuff on the horizon that we can verbalize and begin see taking shape. Yet the supposed supreme safe haven--gold--continues to fade on all this stuff.

Aren't asset markets supposed to price in these expectations? Is anyone expecting these areas to improve anytime soon? Not that we've seen. Gold bugs have gotten exactly what they have wanted and the yellow metal keeps fading.

So, gold bugs (and that includes you Dad if you are reading) it's time to call your office!