Saxo Bank CEO: Short The Euro As It's A "Currency Of Mass Destruction"

Zero Hedge

Authored by Lars Seier Christensen (CEO Saxo Bank) via his blog at TradingFloor.com,

Has The EUR Reached Its Biggest “Sell” Since Inception?

I have to admit that I have been surprised by the EUR’s resilience in recent months…

Readers of my past blogs and editorials elsewhere will know that I think the EUR is a monumentally bad idea. In fact, if it is possible to hate a financial asset, I hate the EUR. It has created countless victims in its trail, de facto bankrupted multiple countries, lost most of an entire young generation in Southern Europe and lead Europe in the direction of a totalitarian super state. So yes, I hate the EUR. May it disappear one day soon, leaving only a sad and frightening memory of an irresponsible, dangerous experiment that is never to be repeated. It will also leave behind gigantic economic and human costs. But it would be far better to take that unavoidable loss soon, before it becomes impossible to reverse. Recovery will follow much sooner if the root cause of the current malaise is removed.

I admit it would be naive to think that the EUR situation will be resolved anytime soon owing to the vast amount of political capital that has been invested in it. The huge European bureaucracy and especially the political elite that feed off the EU will do all they can to prevent the EUR’s fall, at least until it becomes inevitable. This will be either due to pressure from voters (even if they are very rarely consulted in this post-democratic political structure) or from the markets, which eventually must reassume their role that has been perverted beyond recognition during the crisis: the true role of allocating capital and pricing money and assets rationally.

But if we are stuck with this “Currency of Mass Destruction”, shouldn’t we at least try to make some money from it? I think it is a fair assumption that the EUR either has already topped out here ahead of 1.4000…

Why are we likely near or at the highs for the cycle? I think a number of elements point in that direction:

 

 

1. The economy is extremely weak across the entire EU area and the EUR should never have been where it is in the first place.

 

2. The Eurozone wants the EUR lower — and needs it lower. The ECB is probably less skilled and less inclined to drive down its currency than other central banks, but this level is simply getting too painful even for the complacent ECB.

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