Huge Currency Moves Will Cause Trouble

We have got huge currency moves all over the world. The Japanese Yen is down over 50 percent in 2 years. The Euro Currency has collapsed, the Canadian Dollar, the Australian Dollar, the Ruble is certainly one the big ones.

We are going to have some more big dislocations in the world economy because when major currencies, the Japanese Yen for instance is one of the most important currencies in the world, when you have these dislocations, somebody is on the wrong side of the trade. I don`t know who they are obviously, but somebody is long and somebody is short. And the people that are long currencies, when huge moves like these take place, are in trouble.

If you owe a lot of U.S. Dollars for instance, you are suffering right now, wether you are in Japan, in Russia, in Venezuela, wherever you happen to be.

Can Russia Diversify From Oil?

Russia can. Russia has vast alternative assets. They have got huge agriculture prospects, metals, minerals. Look at the map. You will see they have just about everything and they probably have things they don`t even know about yet.

You look at Venezuela, or Iran, or Mexico. It is much, much more difficult for them to switch quickly from oil to something else. But even for Russia, you do not do this overnight. Yes, Russia can change.  Will they do it quickly? Of course not. It takes a long time.

Related exchange traded fund: Market Vector Russia ETF Trust (RSX)