My podcast with MNE contributor Matt Franko

Everyone should short the Saudi riyal

Everyone should short the Saudi riyal. Saudi Arabia pegs the riyal to the dollar at $3.75 and in order to do that (effectively, hold its currency up at some artificial rate) it has to sell dollars to buy riyals.

Problem is, the Saudi's don't have an unlimited supply of dollars and while they do have some supply, it is growing smaller by the day because of the collapse in oil prices. In fact, anecdotal evidence says they might be in trouble because as Matt Franko pointed out in an earlier post, their oil monopoly, Sudid Aramco, is thinking of selling shares via an IPO.

Bottom line...looks like they could be in trouble.

If this peg breaks the riyal is going to implode. You could even get hyperinflation there, which means that a small investment could quite possibly make you a lot of money. Talk about "The Big Short!" Wow!!

Oanda has a USDSAR contract. You buy that, which means you are effectively shorting the riyal.

One caveat, which Matt Franko and I discussed privately...if this were to happe the idiots at the Fed may give the Saudi's unlimited dollar swap lines like they did with the Europeans. If so, that would kill our profit potential. It's definitley a possibility since the necoons in Washington would ot want to see the Saudi regime collapse and they would put a lot of pressure on the Fed to keep the Saudi's afloat.

Even so, I think there is little risk. Just time risk.

P.S. If you don't know how to trade Forex, do yourself a favor and buy my video course.

No one that I have seen has been more accurate on calling exchange rates than Matt Franko right here!

No one that I have seen has been more accurate at forecasting exchange rates than our own Matt Franko right here. He has correctly shown that it's about price setting by exporters. Central banks have largely been passive players. It has NOTHING to do with that "harder to get" B.S. that we've been hearing for the past four years. Good job, Matt!

Bouight some EURUSD today at 1.1120. Looking for a bounce.

The euro got slammed today. Worst down day in two months. (Thought it was "getting harder to get?")

Anyway, I bought some EURUSD near the lows as you can see in the graphic above. Actually it was 1 tick off the lows. This shows you how powerful and precise the analytics are. They're the same ones that I teach in my trading course. (You can buy the videos if you don't have time to sit through the week-long course.)

Anyway, I am looking for a short-term trade, here. Euro may well have reversed down as European oil producers don't seem to be putting a halt on their price cuts. (As per Matt Franko's very astute and on-going analysis.)

But I'm just being a trader who's looking for a 1.0%  profit...repeated 200 times per year!

Buy my Forex course videos!

Euro getting crushed

This is a shout out to Matt Franko, who contributes to this blog and who has CONSISTENTLY been right on the euro (and yen, Canada, etc) all along because of a correct understanding that IT'S ABOUT PRICE NOT QUANTITY!!!

(It's also not about "technicals" or charts, btw.)

Someone sets the price and Matt has been telling us, no, SHOWING US, exactly who: non-dollar exporters. (i.e. German exporters, Japanese exporters, Canadian exporters, etc.)

This is how it works, people.

Kudos, Matt. Don't give this info out anymore, just trade it and make yourself a fortune!

My podcast for March10. Stocks down hard. More debt ceiling. Obamacare. Great FX calls by Matt Franko.

Here's my podcast for March 10. Stocks down hard. More debt ceiling. Great forex calls by Matt Franko.

Amending article about Swiss National Bank losing money in gold. We said it first here on MNE.

Maybe I ought to read the comments more on my own blog.

Matt Franko brought to my attention the fact that WE at MNE were FIRST to point out that the SNB lost money on gold in 2013, It was discussed in the comments section of my blog post on January 16.

Both Cullen Roche and Business Insider put out that information on January 19 and I stupidly posted it up here even though we had been the first out with this information right here on MNE.

These other guys are reading us and not giving attribution.

Anyway, here is the link to my blog post from Friday, Jan 16. You can read the discussion in the comments. Pertinent parts are posted below.

Says they "made 38B" last year.... looks like almost all of it from their USD holdings gaining on the CHF.... (this is how they "make money"???)

BUT, says they "lost" 9B in 2013.....

"After failing to receive money for 2013, cantonal budget chiefs earlier this month urged the SNB to give them more money for 2014 to offset shortfalls in revenue from other sources."

Link given in the comments: Read.

5 percent GDP!!!!

This blog had it right all along. Matt Franko and I had been focusing on what mattered--gross, topline government spending. We never wavered from our bullish forecasts.

The people who have been looking at the shrinking deficit for the past two years just don't get it. It's not about the deficit. All the deficit is, is what's left over after all spending and taxpaying is done, i.e. financial savings.

It's all about how much is being spent and not even that important as to who is doing it, so long as some entity is spending.

We are light years ahead of the other forecasters here. They're  stuck.

-Mike Norman

My podcast for Monday, Dec 8. Interview with Matt Franko.

Matt Franko is my buddy and a contributor to this blog. The guy is a smart, thoughtful, considerate, articulate and a really good dude. Listen to my interview with him.

My podcast for Monday, Dec 8. Interview with Matt Franko, contributor to this blog.

Who's buying them now? (con'd)

Bill Gross, I hope you are listening.

Today, the Treasury did their first post-QE2 3-year note auction that went off AT THE LOWEST INTEREST RATE OF ANY 3-YEAR AUCTION SINCE THE BEGINNING OF THE QE2.

Thank you, Matt Franko!

Matt Franko is a frequent contributor to this blog.