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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (54865)	9/12/2009 6:24:03 AM
From: TobagoJack	11 Recommendations Respond to of 218009

your mind is too selfish, and so imagining all to be similarly selfish if i start with my own best interest, i would be gunho supportive of socio-communist obama, fiat money helicopter bernanke, and the lot of protectionist congress minions, because: (i) by just about all means, obama is driving american capital outward every which way, towards me, certainly a winning play (ii) bernanke is diluting american wealth with ever more printing, allowing all in asia to print, and the resulting leakage of capital is doing wonderous magic for hong kong, firstly, and enabling mainlanders to offload excess capital in hk, all in all a fair win-win wager (iii) congressional protectionist and witch-hunters and all flavors of wastrels are driving capital, and people towards me, encouraging the mainland to go domestic, handing me income and boosting my assets, a pretty good win-win bet but, alas, i am not selfish like you, and so do not think like you, and thus issue warnings via watch n brief, altruistically, as many had throughout history, against fiat money inflation i am positioned to win by being in alignment with usa actions, and i am warning against those same actions by which i should benefit. what are you doing?

To: Elroy Jetson who wrote (54865)	9/12/2009 9:58:07 AM
From: elmatador	Read Replies (1) \| Respond to of 218009

Belabored by heavy debt burdens, the largest net-importing OECD economies are unlikely to supply demand growth to the global economy. However, such growth could come from emerging markets. The latest trends in real exchange rates suggest that "decoupling" (autonomous growth in the emerging markets) could be underway. Economic Trend Revived Oxford Analytica, 09.10.09, 06:00 AM EDT Developments in real exchange rates suggest many of the largest emerging markets can sustain growth. Belabored by heavy debt burdens, the largest net-importing OECD economies are unlikely to supply demand growth to the global economy. However, such growth could come from emerging markets. The latest trends in real exchange rates suggest that "decoupling" (autonomous growth in the emerging markets) could be underway. Liquidity flight. In the summer of 2008, panicked financial markets sent global funds into U.S. dollar instruments, in a classic scramble for liquidity. The result was a sharp reversal in the trend depreciation of the U.S. dollar on a real, trade-weighted basis. The surge in capital inflows to the United States, combined with a contraction in global trade growth, pushed the U.S. real exchange rate sharply higher. Decoupling redux? U.S. dollar depreciation resumed in earnest in March 2009, and the current bout of U.S. dollar decline contains a hint of decoupling: --In the four months since March 2009, dollar weakness is comprised in large part of strength in emerging currencies. --By contrast, in the four months following the U.S. real dollar peak after the 2001 recession (from February 2002 to June 2002), dollar weakness was comprised of strength in developed-economy currencies; emerging-market currencies largely followed the dollar down. This suggests that the current cycle is providing evidence that emerging markets are embracing internal demand, insofar as policymakers are not resisting U.S. dollar depreciation, in marked contrast to the post-2001 business cycle. Industrial production. Another hint of decoupling comes in indexes of industrial production, based on the January-June 2009 average of monthly changes in seasonally adjusted data: --U.S. and other high-income industrial production declined in the first half of 2009. --Industrial production in many of the largest emerging markets posted monthly rises, the key exceptions being Mexico, Russia and South Africa. Growth drivers. Drivers of growth in emerging economies center on the government and household sectors. Fiscal expenditure, whether on- or off-balance sheet, is set to rise in pursuit of key physical and social infrastructure projects. In some economies, households could move to the center as a source of demand growth, supplanting years of growth in savings rates with growth in expenditure. For example, reform proposals in China envision giving households a one-time allocation of wealth in the equity market, transferred from the state. Such a step would go some way in reducing the impetus to precautionary household savings. Qualifications. The counterpart of decoupling is rebalancing--the reversal of current account deficits in the mainly English-speaking, previously high-growth economies, most importantly the U.S. economy. Gross domestic product data seem to corroborate this view: net exports added 1.38 percentage points to U.S. GDP growth in the second quarter, and 2.64 points in the first quarter. Yet both cases are attributable to a collapse in import demand; exports fell in both quarters. China shock? A key exception to the emerging-market currency strength story is the renminbi. It has matched the dollar's devaluation on a real-effective basis in the four months since the dollar began falling anew in March 2009. There is little scope for the currency to strengthen, insofar as the pressure on domestic prices is already downward. Furthermore, policymakers in Beijing would likely respond to a domestic shock by levering down the exchange rate, either through outright currency sales, greater export rebates, or both. There are serious candidates for such a shock in the form of China's overheated equity and real estate markets. Outlook. On balance, many of the largest emerging markets are likely to be able to sustain growth based on trade and production serving final demand within these economies. The trend appears to be gathering strength and would provide a welcome respite for some OECD currencies and a key source of investment returns for OECD institutional investors. To read an extended version of this article, log on to Oxford Analytica's Web site. Oxford Analytica is an independent strategic-consulting firm drawing on a network of more than 1,000 scholar experts at Oxford and other leading universities and research institutions around the world. For more information, please visit here.