Stephen Blumenthal picked YCS (Pro Shares Ultra Short Yen) as the ETF that has the best prospect to outperform in 2014. See the full story in Investor’s Business Daily: Best ETFs For 2014: 9 Picks From 9 Strategists.
We are in a global currency war, and such wars have a history of lasting a long time. The common problem is unmanageable debt. There will be points of crisis, and I believe Japan is next to step on stage. The Japanese yen sits in the least competitive position globally, especially in comparison to the U.S. dollar.
Japan is one of the most heavily indebted developed countries on the planet. Its total debt to gross domestic product is over 500%, compared with the U.S.’s 365%. Japanese gross sovereign debt is around 240% of GDP — numbers that are substantially higher than most of the developed countries. They are borrowing to finance over 50% of their government spending. Japan’s public debt breached 1 quadrillion yen this past summer.
Steve also discusses “Japanese Yen Still a Clear Short” on theStreet. Emerging market stocks are cheap buys following the summer’s sell-off but investors should short the Yen. Says Steve:
Pro Shares Ultra Short Yen (YCS) is a 2x short yen ETF, meaning it makes money when the yen declines. Japan is running an experiment that is 3x greater than our Central Bank. There is a massive amount of manipulation as Global Banks try to create inflation of some sort. Japan is running the biggest experiment. We believe they’ll win at some point, which will hurt their currency relative to our currency.