CAD rape for shorting

The Canadian dollar, along with the base metals have been two the of the assets that I have been looking to short and it seems like we are near a decent entry point for the CADUSD trade.

Not only is the credit bubble in Canada about to pop, but bullishness and valuations extreme on the CAD. The CAD is also at a 5 year high against the EUR (or maybe even an all time high but I lack access to the data at the moment so I'm unable to confirm that).


Central Bunk said...

When you say 'credit bubble' in Canada is ready to pop what are you referring to?
Credit Card Debt or Mortgages?
The mortgage market is about 90% insured by the Fed Government.
Also Canada is running huge deficits. Wouldn't the Canadian dollar rise is foreigners were buying CAD debt with foreign money because that would cause an immediate demand for CAD?

pej said...

Credit bubble includes both credit card and mortgages, and also LBO and Government debt. The biggest debt in the US is the private debt (mortgages mainly for individuals, but also all the corporations' debt).

You are right about the demand for CAD causing it to rise. But I believe that it has already happened, and that a lot of speculation and dumb money has got into the CAD. It's going to be the time for the "smart money" to leave the ship and that would start a massive decline.