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A Letter from Mr. Practical



Editor's Note: Learn more about Mr. Practical here.

Dear John,

Just a quick note to let you know I am moving to Korea. Once settled I will drop you a note as to the specifics.

Europe was interesting and the Euro was safe waiting for certain developments, but I know see where I want to be for the next five years.

I toyed with South Africa, the land of gold, but it was just too volatile a proposition.

Asia is beginning to trade more with itself and their use for the consumer may be beginning to wane, although that weaning process may take some time. But it is clear to me the "crowd" is fully in one place now, and you know I don't like crowds.

The crowd is short yen (and other Asian currencies to various degrees) and long dollars. The crowd is everyone: banks, insurance companies, the U.S. Fed itself (printing dollars by borrowing yen and monetizing long U.S. bonds), the U.S. consumer (indirectly through the Fed's activities) and yes of course, hedge funds. The key to world liquidity is the yen and that is about to end.

I decided upon versus for only one reason. Korean five year rates are 5% while Japanese are 1%. Of course when the yen rallies against world rates it should move more than the Korean Yon, but you know me, I am too squeaky to not be paid interest.

I know one particular beautiful (inside, for I have never met her) lady at Minyanville likes to keep tabs on my moves, so be sure to tell her.


Mr. Practical

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