Simit Patel

Opportunity in Emerging Markets Amidst This Panic

No doubt emerging markets are where it's at, though the problems with the US economy are far from over. The tax base is diminishing and government spending is increasing; this growing budget deficit, coupled with a trade deficit, is a recipe for currency devaluation. The dollar's struggles are at the heart of the US economy's problems, and in spite of this short-term rally, the fundamentals remain unchanged; if anything, they've worsened. Those who understand that the current economic situation, like the Great Depression of the '30s, is a result of terribly monetary policy by the Federal Reserve, know this. First comes the boom, then comes the bust. Last time around it was the Roaring 20s and the Great Depression; this time around it was the tech stocks bubble and housing bubble followed by the massive credit crunch (which the Federal Reserve is making worse through its deeply inflationary efforts, just as it did during the Great Depression).

A sound portfolio will be in precious metals, commodities, emerging markets, and foreign currencies. Yes, now is a great time to buy as the dollar's strength won't last too much longer. 2009 is going to be a year to remember.