Tuesday, July 19, 2011
The image immediately above this post is the cover of Der Spiegel (the Time magazine of Germany) which appeared during the last week of June. The cover image is of a casket draped with the Greek flag on which a picture of the one euro coin appears. The caption reads "Sudden and Expected - Obituary for a Common Currency".
Above that cover image is the cover of the latest Economist in the colors of fear and danger - red and black. It shows the one euro coin teetering on the edge of a precipice which takes the shape of Italy, the latest worry of Euro bond traders.
Normally I don't pay much attention to covers like these unless the market in question is at an obvious extreme in price. The Euro currency is not, at least not against the dollar.
Even so, I think it is remarkable how universal is the bearish sentiment about the Euro which is expressed by these two cover images. I happen to think the Euro is headed for 1.5000 against the dollar. These covers make me think that it has a good shot at its all time high of 1.6039 against the dollar. I think Europe will muddle through the current crisis. Global economic activity in the US and Europe will begin to pick up and this will ease the pressure on European banks, increase tax revenue, and temporarily put off default by Greece.