Global equities: First pillar emerging?

Wednesday, December 17, 2008

Global equities will show sustained rallies only after the USD currency and bond market bubbles are popped. How do you invest cross markets when foreign exchange rates are out of whack due to the financial crisis...flows of money have occurred against the grain.  USD appreciation was due to dollar buying to cover losses and reduce risk. When the USD starts to slide we will know that risk aversion is abating...and the price of goods in the US will rise due to the devalued currency...even home prices may stabilize:

The chart at left shows the US dollar falling against the Euro..of course interest rates are firmly in favor of the could portend declining redemptions and flight to quality. Risk aversion decline?

This chart shows the decline of the US dollar against the Yen...this is the lowest $/Y level in over five years.  The carry trade is unwinding and then Yen loans are being repaid...

This chart shows the USD index... it suggests that the USD has peaked.


When the USD bond market bubble burst we will know that credit concerns are diminishing...equities will again become a viable growth asset class.

This chart shows the price of 30 year Treasury Bond...the yield is a measly 2.66%...lowest level since the introduction of the 30 year bond!!  This bubble has to pop.


Helicopter Ben is hard at work...You get $100 free if you open a savings account at some US Banks!  Free money..better than a toaster.

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