I think that to believe that the euro will
continue to be a strong currency you need to believe first that the fiscal imbalances
of the European Union are going to be sorted out. Politically, and knowing the history of Europe,
not– before the European Union even, it is very difficult to believe. So that’s the part that is very important. But the euro will exist, now the problem is,
is it a currency that is a reserve of value for the world? And that is where the picture starts to crack,
if you want to be bullish on the euro relative to the dollar. Because no matter how you want to look at
it, if, even if you look at data from the Bank of International Settlement, if you look
at data of use of currency, the reality is that the utilization of the euro as a currency
globally is actually not increasing, while the use of the dollar is increasing. So if you have the demand of dollars going
up while supply of dollars is not increasing, because the Federal Reserve is tapering, is
reducing its pace of easing and is increasing rates, et cetera. So demand for dollars is going up, supply
is not growing radically, that defends the US dollar as a world reserve currency, reserve
of value. That is the opposite with the euro, with the
euro what you have is the Central Bank of Europe, the European Central Bank increasing
supply of euros while demand for euros is reduced even further if you look outside of
the eurozone. Because the eurozone obviously trades a lot
within itself, and when the European Union talks about exports they talk a lot about
exports within themselves. It’s like talking– today, it would be like
talking exports from, I don’t know, Illinois to Michigan. So one of the things that I think is dangerous
about being bullish on the euro versus the dollar is precisely that, it’s demand versus