Sunday, October 14, 2012
The correlation between the US$ and the Euro is just an irrational exuberance
The market is way too speculative (Irrational Exuberance), and the analyst does not say that! I bet the Euro will survive and revive in the long run but get highly depreciated in the short run. The US$ will be kept depreciated. Thus, even
though I have not yet tested in econometric analysis, by my natural intuition, I claim that there is "no rational" particular correlation between the US$ and the Euro: The currently observed negative-correlation between the US$ and the Euro has been caused by the irrational speculation in the investors' mind. J.M.Keynes was right in terms of the investment analysis; the irrational exuberance is always a dominant effect on the market value fluctuation!