European Commissioner for Economic and
Monetary Affairs, Joaquin Almunia told the
Thursday, February 11, 2010
The Shelton Letter
James W. Shelton
Jshelton31@gmail.com
(859) 486-0100
While you were sleeping, the US Dollar and the
Japanese Yen trade lower against other currencies;
in particular against the Euro, Aussie, and Sterling.
The past weeks extreme bearish biased does
warrant the strength in these currencies, as a
correction is certainly expected. But, one must also
note, we find ourselves speaking again and again of
budget deficits and monetary policy. Throughout
yesterday and early this morning, it appears as if
the once concerning fundamentals, will no longer
distress the marketplace as economic officials have
embarked on fixation.
This morning, more so than the past weeks, we
can’t help but experience optimism towards the
Euro. This unfamiliar feeling comes as leaders of
the currencies extraordinary nations are placed in
the same room, to organize a multibillion-pound
rescue of the Greek economy. There will be
disagreements and one should not be surprised of
this, for the economic reasoning within the walls,
deals with multiple parties insisting on a different
solution. This disagreement, which will make
discussions quite complex, is quite simple. I say
this as a 50/50 question is that of best odds. But, in
this case, we will not be choosing A or B, rather,
IMF or EU, funding.
James W. Shelton
European Parliament on Tuesday, which was also
his last day serving, that “We don’t need to call in
the IMF” and “We have more than enough
instruments in the EU treaty to tackle a situation
like the one we’re faced with at the moment in
Greece.” While this may be true and devices may
be present, they must be ones of exotic creation.
I’m not implying that Mr. Almunia is incapable of
analyzing a treaty properly but I must emphasize
Article 122, the Treaty of Lisbon:
2. Where a Member State is in difficulties or is
seriously threatened with severe difficulties
caused by natural disasters or exceptional
occurrences beyond its control, the Council, on
a proposal from the Commission, may grant,
under certain conditions, Union financial
assistance to the Member State concerned. The
President of the Council shall inform the
European Parliament of the decision taken.
My deepest apologies Mr. Almunia, but I am
oh’ so very certain that a country, such as
Greece, has the capacity to “control” its debt.
You certainly aren’t insinuating that this is
not the case? If so, pity the EU and fear what
will become of Greece, Spain, and Portugal.
Although, one must acknowledge Mr.
Almunia’s attempts to keep deficit issues
within the European Union for it is
honorable. He, along with others in favor of
an EU bailout understand the potential
threat to the, fairly young, Euro currency if
outsider intervention occurs. Greece’s
request of 53 billion Euros to the EU will be
assessed differently from non-euro zone
members in distress, as they are allowed up
to 50 billion Euros in aid, regardless of an
issue created within the nation’s control.
Jshelton31@gmail.com
 display its strength again. If this is not the
case, it will be in the days to come.

THE AUSSIE: An
Economic Relief: One can
see for themselves, those
who have an interest in the
Australian economy
welcome the declining
unemployment situation
(top left) with open arms.
After the release of this
Moving on to a more positive discussion, number the Aussie
pummeled the bears
Australian employment, whose numbers (bottom right), filling the
were particularly pleasing. The Australian large amount of sell orders
Bureau of Statistics revealed that the at the .8800 level.
economy added 52,700 jobs in January while
the Unemployment Rate declined to 5.3%,
the lowest in 11 months. Economists and
analysts were expecting for a gain of only
15,000 and an increase in the jobless rate to
5.6%. One can only imagine the expectations
that will come of the Reserve Bank of
Australia and the continuation of tightening
interest rates. If I were a betting man, I
would do so on the side of higher rates when
they bank meets in March.

Yesterday, Federal Reserve Chairman, Ben

Bernanke, one who we are particularly fond
of, gave testimony to a group which we are
not so caring towards, congress. He unveiled
and gave outlook to the Fed’s “exit” strategy.
He hinted that an increase in the Fed’s
discount rate is a necessary element to return
the marketplace to equilibrium and that this
would take place “before long”. Those who
enjoy a strong dollar should be very
welcoming to this statement. For now stocks
and commodities are higher on this and
relief of a Greek bailout, we shall see how
the rest of the day pans out. Remember the
trend of equities, gold, crude, and the Euro is
that of a bear. I think later in the day we will
see an end to corrections and this trend will

James W. Shelton Jshelton31@gmail.com