This is a nation that has the highest debt/GDP ratio—at 230%—in the world, a budget deficit of 9.2%, and a central bank that is committed to devaluing its currency in the hopes of increasing exports.
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New York, NY (PRWEB) December 27, 2011
The Commitments of Traders (COT) report for December indicates that there are more bets against the euro than at any time since June 2010; but, according to Sasha Cekerevac, contributor to Profit Confidential, investors might want to consider switching their short position from the euro to the yen.
“This has been a dismal year for the euro,” says Cekerevac. He believes that there is a lot of warranted negativity towards the euro due to political inaction; but when so many investors are leaning one way, there is the possibility of a short squeeze. According to Cekerevac, Japan is the next currency to be under pressure, and it’s one in which few investors are yet to be heavily involved.
Cekerevac suggests that investors might want to look at the Japanese yen. “This is a nation that has the highest debt/GDP ratio—at 230%—in the world, a budget deficit of 9.2%, and a central bank that is committed to devaluing its currency in the hopes of increasing exports,” Cekerevac writes in Profit Confidential. “On several metrics, Japan’s currency looks overbought.”
Cekerevac reviews the last time investors were this heavily betting against the euro: summer of 2010. He states that it was “the low of that year for the currency, as investors soon rushed for the exits.”
When looking at Japan and the eurozone, Cekerevac highlights that, although both regions have significant structural problems that need to be dealt with, Japan has demographic issues that can’t be fixed with a simple vote.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
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Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.