Martin Kronicle

George Soros in Davos this year.

George Soros will literally start to have a backache when all of his faculties don’t line up anymore. Here is a quote from How George Soros Knows What He Knows by Flavia Cymbalista, Ph.D.

“My father will sit down and give you theories to explain why he does this or that. But I remember seeing it as a kid and thinking, Jesus Christ, at least half of this is bullshit. I mean, you know the reason he changes his position on the market or whatever is because his back starts killing him. It has nothing to do with reason. He literally goes into a spasm, and it’s this early warning sign.”

You can read all about it in Section 4. The Role of the Backache: an Entry-Point to Experiential Reflexivity found on page 36 of the pdf attachment.

Photo of Soros Copyright by World Economic Forum. swiss-image.ch/Photo by Sebastian Derungs and is licensed under Creative Commons.

Bloomberg ran an interesting article on the relationship between the Australian Dollar (AD) and the Canadian Dollar (CD) the other day. Both are considered commodity currencies b/c their respective economies rely heavily on commodities. Easy, right?

“The Australian dollar is being overtaken by the Canadian dollar among commodity currencies as the safety of Canada’s banking system and ties with the U.S. economy spur investors to buy the loonie.” Maybe this is true, maybe it’s not, but you can see what the rest of the world thinks of this cross rate (see below) by looking at the chart and seeing for yourself. There is an upward trend the cross as indicated by the red line.

Bloomberg has a nice chart of some of the major currency crosses.

Like the term greenback, the word loonie is slang for Canadian Dollar b/c there is a picture of a loon on one side of the coin.

Besides trading these as outright, directional trades, you can create relative value – or spread trades between the currencies. As a default, the currency futures contracts are benchmarked inversely against the USD, so if you’re long the Loon, you’re short the USD. But you can avoid all that by trading crosses: relationships between two currencies other than with the USD.

I’ve written a few posts on George Soros and his recent gold accumulation. Here is Victor Sperandeo on what George Soros is actually thinking by simultaneously calling gold “the ultimate asset bubble” while at the same time raising his Gold stake to 9% of his long holdings at Soros Fund Management.

Sperandeo is the only person I know who ever received a cold call from Soros to run his money.

Why Would Soros Buy Gold Futures or a Gold ETF (GLD)?

George Soros and Gold Position Limits

George Soros: Massively Bullish on Gold

Click to enlarge.

Check out this chart from AFT, LLC.

According to Peter Bernholz, whenever you see a government borrow to cover 40% or more of its fiscal expenditures, it’s resulted in hyperinflation. Bernholz wrote about it extensively in his book Monetary Regimes and Inflation: History, Economic and Political Relationships.

The US has recently been as high as 44%.

Unless we see growth upwards of 3-4%, there is an almost 100% chance that we will see hyperinflation.