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Denmark De-Dollarizes
"We are taking no action based on rhetoric alone."
So said Anders Schelde, CIO of Danish pension op
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Is the Danish Kroner still a vector for spec to play on a breakup of the euro? Some hedge funds put money into it and bought long-tail options on it thinking it was an EU country with local monetary control. Obviously, the Danish money and bond markets do not have the same capacity of the Swiss.
“if America no longer intends to provide for the security of its allies, thereby forcing them to join US adversaries in considering alternatives to the dollar.”
I admire that linkage between the dollar and comfort that the USA will be there for you.
Anyway, here’s another linkage for you: Maybe just maybe offshore holders of US assets have started to hedge their value by forward sales of the dollar? Directly or via derivative products your local investment will be happy to show you. It’s a cautious way to buy time.
Don’t be too kind to Trump, our deranged President – I hope I have found an appropriate adjective for him. The global market is very delicate and the U.S. has always been clumsy. It is not that far above South Africa in London’s view or even Guyana, with the (highest GDP per capita in South America today). Also, the U.S. is not so strong comparet to 48 years ago when West Germany was king and Denmark was tagging along. Nixon and Ford lost Viet Nam and President Carter went for Growth. He also picked G William Miller, a go-go Fed head. On November 1, the U.S. had a currency crisis and Europe would not aaept the dollar bonds. As I am a timing – leads and lags nut – I calculate the equivalent timing as November 2026 – the mid term election. That Danish pension fund could be the first of many vultures.
After watching Trump’s rambling yesterday, the midterms can’t come fast enough!
The 2026 midterms won’t happen or will be significantly “delayed”. Book it.
FYI: it was reported in the Dutch financial times today, that the NL’s largest pension (EUR >500bn+) fund sold 40% of its treasuries last year. Their position went from EUR 30bn to EUR 18bn. They didn’t actively report it and was only now noticed by a journalist.
EUR 12bn is just a drop in the bucket, but it speaks to the movement that is going on.