Bad is in the Eye of the Beholder.....

In the past few months, the World has watched as Europe's debt crisis has escalated and Greece approaches default. Many see this as the beginning to a world wide recession. However, some see opportunity in the current crisis and have a bullish attitude towards everyone's growing concerns. One such man is John Taylor, the head of a giant Foreign-Exchange Hedge Fund called FX Global Currency Program. Taylor believes that because the dollar is the worlds reserve currency, it is a good reverse indicator of the world economies health. Taylor's theory is that when gloabal economics are positive, value of currency goes down because of "ample" liquidity. However, when Global economics are doing poorly, liquidity is down and the appreciation on the US dollar goes up. John Taylor and FX did well last week, as their biggest position was in the dollar, along with "Short equities, and positions in long term Treasury yields." Taylor also uses the poticial climate of the United States as an indicator of how the US dollar will do. He beleives that the GOP will win the 2012 elections, and because of the GOP's unwillingness to print anymore money, a recession will follow. This will, in turn, make the dollar more valuable.