UBS Forecasts EUR at $1.15

UBS, the world's second biggest currency trader, has just come out and said it predicts the Euro to trade at $1.15 in the next few months (note they called for $1.40 at the beginning of the year - ouch! - and they pay their analysts ALOT while Donny Baseball toils away in relative poverty and obscurity. ok, that's not true, I made a little coin being short the Euro). Readers of this blog (all three of you) will find such a prediction quite familiar as I have saying this for a few weeks now.

Should I be worried now that the high-priced minds have come around to my view? Nah. I'm still looking for $1.10. Look no further than today's news out of Germany. Angela Merkel was basically offered the Chancellorship if she abandoned her principles and adopted the Social Democrats economic platform. "Done!" sprechen Angie. So now, in response to Germany's massive deficits (which would be easy to grow out of, like we do here in the US), Merkel has proposed a massive increase in government spending on roads and bridges and stuff. Labor reform, deregulation and pro-growth tax cuts? Nein, nein and nein. So I fear the largest economy in Europe is going nowhere fast. Maybe they'll even build a bridge there.