Biderman reiterates his earlier year call to dollar-cost-average into long Gold (GLD) and short Euro (FXE).
Long term reasons to buy gold are same. US, Europe, Japan continue to create paper money with which they pay bills. This will not stop any time soon. Emerging market central banks will continue to load up on gold bullion, and ignore developed nation currency as much as they can. Eventually, they will create their own reserve currency eventually displacing the dollar.
The Euro is a better short now than it was 3 months ago. In January, the ECB gave $1 trillion of euros to hundreds of European banks so the banks could buy their country’s bonds. That money has now been spent, and Europe is already in a recession, and the recession is deepening. Who wants to own the Euro if you don’t have to. It’s growing 1% slower than the 3% rate of inflation. Target is par with the dollar by the end of 2012. While gold should go up in dollar terms, it should go up faster in euros.
Mark Hansen interview: crumbling home prices in Australia, Canada, and New Zealand have removed those currencies from being a safe haven.
I would add to this, short the Hungarian Forint, as it is emerging market Europe.