First and foremost, the Greeks have already effectively defaulted. A so-called 'voluntary' swap is in effect a default. As in not a default in amount, but a default in the contractual obligations which binds the bonds to the certain number of years stated.
In my personal opinion, the EURO was a wrong move right from the beginning. Those who have read the chinese classic 'Romance of Three Kingdoms' definitely remembered the 'Chained Ship Tactic' that Cao cao was coerced into using against the State of Wu.
The EURO effectively ties the economies of the 17 EURO countries into a single entity, promising stability and synergistic advantages. The same can be said for the tactics employed by Cao cao. In life, everything has a pro and a con. Cao cao's armies were eventually wiped out, simply by setting fire to a single ship in the chain.
The fire spread fast through the chain and within hours, Cao cao have lost almost all his troops. Greece is on fire now, and the ECB is desperately trying to douse out the fire, hoping to calm the markets and escape the inevitable fate of sinking with Greece. Will it work? I certainly hope so, yet logically the issue does not end with Greece, dont forget about Portugal Italy and Spain.
And hence, considering all these, i took a short position on EUR/USD, reviewing after 3 mths from now.
Alright, enough ramblings for now. I have attached a link below for you guys to check out the story i was talking about: The Battle Of Chi Bi.
Wiki: http://adf.ly/64z8j
Nites!
(Disclaimer: I do not recommend or posit anyone to adopt whatever strategies i describe here, so i will not be responsible for any loss whatsoever resulting from your attempts to replicate the strategies.)
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