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By Monty Guild and Tony Danaher, on September 30th, 2010
Last week, the Merrill Lynch economics team wrote a good paper about liquidity flowing into Asia. Here is a summary of their conclusions: Liquidity will flow into the Asian region raising consumer spending, stock prices and currency values.
We agree with their conclusions, and here are a few of our own. In the following countries: India, Indonesia, Malaysia, Thailand, Singapore, and China much new liquidity will enter. It will be in the form of foreign direct investment and investment money moving into stocks and bonds.
With the exception of China, which is being singled out for a trade battle . . .
Continue Reading: MAJOR INVESTMENT OPPORTUNITY – LIQUIDITY FLOWING INTO ASIA AND WESTERN LATIN AMERICA
By Monty Guild and Tony Danaher, on September 22nd, 2010
THE U.S. STOCK MARKET
The U.S. stock market is rallying, and the U.S. dollar is slowly declining in value relative to a basket of other currencies. Although inflation may not occur for another six to twelve months, an oncoming inflation will cause demand for assets that can grow, such as: income-producing real estate, gold, global growth stocks, and the world’s better managed currencies. THE POLITICAL INFRASTRUCTURE OF THE U.S. AND EUROPE WILL CHANGE
The recent primary election season in the U.S. has given full voice to the forces of change in the U.S. political system. We . . .
Continue Reading: WE SEE OPPORTUNITY
By Monty Guild & Tony Danaher, on September 14th, 2010
Privately we have been increasingly bearish on the prospects for long-term bonds for many months. We waited until August 27, 2010 to put out our first strong recommendation that readers sell their long-term bonds in the U.S. Clearly we were lucky with our timing. Almost immediately long-term U.S. government bonds began to fall in price and rise in yield, and since that time investors have lost 2.5 percent of the value in their 30 year U.S. government bonds. When you consider that at the price peak of long-term U.S. government bonds only paid 3.6 percent per annum, 2.5 percent . . .
Continue Reading: SOMETIMES WE GET LUCKY
By Monty Guild & Tony Danaher, on September 12th, 2010
Now, the markets are gradually recovering their balance but the long-term effects will be felt by investors…and one big effect is the heightened awareness of the fragility of the world’s financial system. Central banks have fewer tools because much of the world’s banking system that has been created over the last two decades is a shadow banking system, centered around the derivatives markets, and out of the direct control of central bankers. This limits the central banks’ options for dealing with a crisis such as this one. They still have the option of flooding their local banking systems with . . .
Continue Reading: THIS YEAR, ONCE AGAIN AUGUST WAS A VACATION MONTH….EXCEPT THIS YEAR IT WAS A VACATION FROM RATIONALITY AND CALM
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