Merlijn The Trader
Bitcoin & Altcoin Trader, Founder of Profitz Academy
The euro loses as the EU centralizes power in Brussels, which accelerates capital flight. Removing national vetoes on foreign policy, which Commission President von der Leyen backed on April 14 as a way to avoid systemic blockages, is the fifth such decision against diversification. It follows tighter stablecoin rules, crypto regulation under AMLR in 2027, a €10,000 cap on cash transactions and 212,000 banking jobs expected to be lost to AI by 2030. x.com
France cannot print its own currency, so a debt crisis there could force an ECB rescue that erodes the euro's purchasing power soon. If Paris cracks, Italy follows. France's 10-year spread over Bunds is 174bp versus Greece's 109bp despite its A+ rating, though 2011 Greece was much worse. Default risk is low; the ECB backstop is priced in, but intervention is uncertain and its TPI has conditions France may resist. x.com x.com x.com x.com x.com x.com
France's fiscal bind and widening French-German bond spread raise contagion risk across Europe and threaten further euro weakness against the dollar. There is no easy economic way out for France, a problem that may apply to many EU countries. The 10-year spread is nearing the 190-basis-point level seen during the November 2011 eurozone crisis; the euro should continue to weaken against the dollar. x.com x.com
The euro should grind higher against the dollar through 2026 as a more dovish Fed weighs on the dollar over the medium term, even though safe-haven flows support the dollar near term. EUR/USD stands at 1.1720, with the dollar index flat at 98.50. x.com
Rising French sovereign yields signal the disintegration of France and the EU/euro. France's 10-year yield is now above 5%, with an 8-9% target; EUR/USD's 1.12 level still acts as support, though it shows a huge negative divergence. x.com
European financial stocks look badly exposed to socialism, second-order effects from Iran and collapsing credit, so the short on European financials stays. @qthomp, often a sparring partner on tech, fully agrees here, and the FT reports, via @LiveSquawk, that hedge funds are making record bets against European stocks. x.com
The US dollar appears to have finally cracked, which would be good for the euro and the yen, along with gold, bitcoin, silver, copper and bonds. x.com
Circle's USDC has a temporary EU go-to-market moat. The European Banking Authority gave USDC alone 'significant' stablecoin status among 45 e-money tokens under MiCA, adding a regulatory advantage to Circle's case as a sleeping giant. x.com x.com
European equities are a lost cause until new leadership arrives, as stories of entrepreneurs fleeing German bureaucracy show. Saving Europe probably means breaking it first, and the time to buy is in the wreckage. x.com
The euro should stay resilient because higher European interest rates make it structurally far sturdier than the yen, especially with so many shorts placed against it. US selling of euros to buy yen was too small to overwhelm broader euro-bullish macro trends in a market trading over $7.5 trillion a day. x.com
Gold and silver are where everyone will put their money as savings come under threat. EU citizens should save in gold, silver and bitcoin because Ursula von der Leyen is about to go after their savings amid stagnation and rights restrictions. Luke Gromen notes the dollar has fallen 93% measured in gold since September 2001. x.com x.com
