Forex Bubble?
Michael Kahn comments on the Traders Expo, and says there doesn’t appear to be a lack of interest in trading (So the appetite for speculation is still healthy – is that a sign that a true ‘bottom’ might still be a ways off? – BMB).
He also wonders whether the ‘next bubble’ might be in forex:
In talking with colleagues, two ideas came up:
- The stock market is experiencing a buyers strike. There seem to be positive happening but everyone is saying, “you buy first.”
- The next bubble is not in gold but in forex. (See above). It was everywhere at the show and someone said they were offered leverage of 200 to 1. Two hundred to one! Sounds like no money down, no income check real estate to me.
The problem with a forex bubble is that there is no one currency to deflate. Pop one currency and by definition others soar. So what might this mean? Either a blowup of the industry (hey regulators, are you listening?) or a popping of the bubble in terms of the one currency that is not forex – gold.
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