John Taylor, who runs $8.5 billion currency hedge fund FX Concepts, was interviewed by Chrystia Freeland at the 2011 Reuters Investment Outlook Summit. He believes the U.S. will be in a new recession by the middle of 2011 (video embedded below). Here's a summary of what he said and links to video clips at Reuters.com.
*His trades are betting that the U.S. economy will be in a recession next year
*Commodities could come off affecting the Australian Dollar (AUD) and CAD
*British Pound Sterling becomes more valuable in Euros in next year (GBP/EUR)
*Predicts Euro/US Dollar will hit 1.0, sell EUR/CHF (Swiss Franc)
*In the long term he thinks the US Dollar will go down (U.S. austerity, fiscal problems)
*Gold will drop LESS than other assets
*After Ireland, bailouts hit Portugal, Spain, Italy or Belgium, France (10 year event)
In the short term he sees weakness in commodities, commodity currencies and a boost in the US Dollar as carry trades unwind during the next U.S. recession (mid-2011). In the longer term John is bearish on the U.S. Dollar due to fiscal problems.
John Taylor: Euro problems to spread (2:56) Reuters Video
John Taylor: Gold to "drop less" (1:16) Reuters Video
John Taylor on 2011 currency moves (7:14) Reuters Video
John Taylor: Recession back in 2011 (2:04) Reuters Video (embedded below)