@0.0. Inflation nach 'Aden Counting' .......................

Emerald, Samstag, 09.02.2008, 23:15 (vor 6679 Tagen) @ Onkel Otto

GLOBAL INFLATION ON THE RISE
As you know, global inflation is
rising (see Chart 11). Prices are
moving up in 80% of the countries
tracked. It’s happening in Europe,
Latin America, Asia and especially
China where the worst snows in 50
years have wreaked havoc on the
population and agriculture. This is
expected to fuel higher prices, putting
pressure on an inflation rate
that’s already at an 11 year high and
We’ve often discussed all the
reasons why the U.S. dollar has
also noting that this is the profile of
a third world economy.
The point is, the U.S. has been
living beyond its means for a long
time. Combined with globalization
and stiff competition from abroad,
a global economic power shift has
gradually evolved, toward the East
and away from the West, and this
is reflected in the currencies.
ASIAN POWER
As you can see on Chart 14, in
stark contrast to the U.S. dollar, the
Asian currencies have been soaring
along with their economies. The
Singapore dollar and Malaysian
ringgit have been among the strongest
currencies reaching decade
highs, and happily we’ve
been recommending the
Singapore dollar for a
year now. Despite these
rises, the Asian currencies
are still considered
undervalued against the
U.S. dollar, so they’ll
likely continue to rise
further this year.
There’s been a lot of
discussion about the recent
strong upmoves in
mains down for all interest rates and
we don’t expect that’ll change any
time soon, especially with recession
fears taking center stage. But as inflation
becomes more obvious, it’s going
to drive long-term interest rates
higher. The major trends, however,
will not turn up until the 10 and 30
year yields rise and stay above 4.55%
and 4.78%, respectively.
If you’re holding bonds, it’s okay
to keep them. But don’t buy new
positions at this time. If long-term
rates head higher as we expect, bond
prices will fall. If the market stays
bullish, you can buy later at better
prices if you want to, but there’s also
a good chance that bonds will turn
bearish this year and you’d then
want to steer clear of them!