Tuesday, April 7, 2015

2 'fer on European Watches...


Get 'em while they're hot:



Indicative of continued EUR bearish imo.

5 comments:

mike norman said...

Breda?

What kind of "European" watch is that?

All kidding aside, you have been more right than anyone else, including a certain MMT person who seems to change his views every day (technicals, no, fundamentals, no, technicals).

Good job.

Matt Franko said...

Mike

"Breda" is a city in the Netherlands... so I assume this is some sort of "European" watch...

who knows they are probably made in China.... but that doesnt matter imo... imo what matters is what EZ "ownership" entities do wrt the change in prices they present for their wares (no matter where they are made....) to US customers in USD terms...

If a EZ "capitalist" lowers its price in USD terms it is a devaluation for everybody over there associated with the efforts... "capitalists" or "ownership class" included...

iow, if BMW made cars wholly in China that they sold in US last year for $40k, and then this year they lowered the price to $35k to sell more, then this will show up in a devalued EUR in USD terms... they have devalued the unit price of the EZ franchise's output in USD terms (price) but they can still end up "making more money" (quantity)...

rsp

Matt Franko said...

Attempting to apply "its about price not quantity" consistently..... avoiding any/all monetarism.... rsp,

Anonymous said...

So how does the ECB's "setting the quantity", hard money thing work wrt huge fx flows (18 times trade flows per Jose G.?)

Matt Franko said...

all I can say at this time is that the flows dont matter directly to price changes ... if you sum those flows from one time to the next then you get a quantity of sorts... but what if all of those xactions take place at the same price?

Then the price is unchanged...

for the price to change there has to develop some sort of imbalance (supply/demand shock?) or an authority has to change the prices (price aggressivity...) the implication is that changes in the pricing strategy of multinational firms creates some form of imbalance... this imbalance I suspect is in the system of finance/banking supporting the trade and somebody there ends up needing to shore up USD positions due to their seeking to remain within USD system regulatory compliance as prices of financed products are reduced in USD terms....

What we would want to see is these bearish USD price patterns reverse and THEN see the EUR/USD start to go back up... for some sort of confirmation of the theory...

rsp,