If you are a foreign currency trader, and I am, you must think of each foreign currency as if it was your daughter.
Who are her friends? If she has “nice” friends who are well behaved and well educated and come from middle class or wealthy families everything will probably go along extremely well.
But, if her friends do not behave well, are uneducated in the sense that they have problems which they cannot solve, and their wealth is tumbling for whatever reason—Watch Out!
Today, I am thinking of Norway and the Norwegian Kroner.
Norway is a small demure country which sits on the North-East perimeter of Europe. Norway has five million well educated and well behaved people. It is a socialist country with high taxes. However, the people of Norway recognize that all politicians are always corrupt, so they keep a tight rein on their politicians.
Taxes are spent for constant maintenance of the infra-structure, education of the people and the marketing of Norway as the most naturally beautiful country in Europe.
This marketing is the only honest marketing on the planet.
The coastline and the topography of Norway is beyond enchanting—it looks like a different planet. The mountains go down to the sea in irregular tiny bays and inlets called “Fjords.”
These Fjords mix the beauty of a pristine and untouched ocean, filled with fish and small sea mammals with a rugged and unpredictable coast.
The Norwegians are ecological purists. They do not permit plastic or other pollutants to debase their seas, their rivers or their forests. In you stare into the water of a Fjord you can clearly see fish swimming thirty meters below the surface. Whales and other sea mammals such as dolphins, jump and play in these waters.
Some intrepid Norwegians will leap out of their small sailing skiff and joint the whales, including killer whales, for friendly swimming in the cold clear waters.
Norwegians have been living in Norway for the last fifteen thousand years. They and their other Nordic brothers and sisters are totally unlike modern Europeans.
They are completely blond. At birth they look like small colorless puppies. They have large heads and inquisitive eyes which rapidly turn deep blue. Their hair at birth is almost without color, but within six months turns an intense blond. They become tall and extremely attractive.
The Norwegian males of today were the Vikings who went around the world fighting and conquering all other males wherever they went. One can find blue eyed people in Sicily, an island that the Vikings visited over a thousand years ago.
They discovered Greenland and North America, hundreds of years before Columbus discovered the islands of the Caribbean.
Since they are strong, healthy and intelligent, they control their government very well.
Healthcare is completely free. So is higher education. When a woman delivers a baby, she and her husband receive financial support from the government until the child enters a pre-school setting. Neither the mother nor the father is required to work. They both care for the baby.
NORWAY AND THE EU
Norway’s economy is excellent. Norway exports natural products such as fish and timber. It has strong tourism and a strong relationship with other European economies.
Most of all: Norway has oil! Off the coast of Norway sits a large undeveloped body of high quality petroleum. The Norwegians have been draining this booty for the last twenty years, but there is an immense reserve which can support Norway for another century.
As a consequence of the oil wealth, the cleanliness of the Norwegian government, in the sense that they are not plundering their people; Norway has always had a strong currency.
I have been buying the Norwegian Kroner, off and on, for the last decade. Now, I have a large contract coming due, and I am in a quandary. Should I sell and get out of the Kroner, or stay with the currency and make higher interest returns than I can make almost anywhere else in the world?
The EU is the nemesis. If the EURO goes down the drain, the Kroner will survive, but it may take a major hit. The price of oil going up will support the Kroner. But, the instability of the EU will weaken it.
I think the EU has a high probability of either collapsing or weakening if and when Greece exits. Therefore, I am getting out of the Kroner. What a pity! I like that puppy…