Nepzone

8 Notes About The Fed

Major Economic Scenarios


A. Pro Economic Expansionist Governments

In this day and age Governments and politicians seek only to ensure economic expansion (note: In the Clinton Years inflation data was actually manipulated to reflect lower inflation) indifferent to everything else especially Inflation & Speculation.

In some cases Governments actually unbalance the playing field by estalishing Sovereign Funds to enhance their profits and thus competing with the private sector in pushing asset prices and subsequently inflation higher.

B. Flaws of Globalization

Obsessed with growth, Governments expand free trade and encourage globalisation thus opening their countries to greater economic imbalances especially when there are sudden movements in the flow of "hot money" (ie. classic example in the 1997 Asian financial crisis). Just imagine if some countries did not protect their farmers, what would have happened in this current "food inflation crisis"? Free trade have effectively placed some economies at the mercy of others! Thus, has National Security been compromised?

C. Hyperinflation

The factors above have now pushed the world into a hyperinflationary period. The US Fed has EVEN reduced interest rates in the face of severe inflation giving birth and stoking the next bubble. See how twisted Government policies are nowadays! Luckily, we still have a responsible Euro Central Bank.

D. Increasingly Polluted World

Governments in search for economic growth have effectively forgotten the environment.

What Is the ECB Smoking?

I think the ECB is the only major power doing a admirable job in analysing economic data & a good job in containing inflation.

Many central bankers are only helping fan inflation, especially the US FED.

Let's be serious, if we are really in the Greatest Financial Crisis Since the Depression, the DJIA chart surely does not reflect this crisis at all. The DJIA is not very far from it's all time high, and the current crisis is even less severe than the Sept 11 Bombing.

As such, the US FED is using this as an excuse to help bail out friends on wall street and in doing so fanning the next big bubble.

Let's put things in perspective, the current financial crisis is only affecting Corporations that were greedy, thru their greed they failed to institute & practice safe lending practices. Home owners loosing their houses now probably shouldn't have qualified for a home loan in the first place if banks were not so greedy!!!

And the FED using all sort of excuses, jumped in to help their friends on wall street.

Let's be serious, IBM and so many other companies are still posting profits (not losses). So how can this be the Greatest financial crisis?

Don't take my word for it, just look at the DJIA chart

China's Worst Bear Market

your comments are not accurate, there was a greater bull run and bear run from 1991 to 1993, check your charts!

Google Delivers; Stock Up Sharply

If google wants to improve on quality clicks, they can kiss their profit growth Good-bye!

Let's be serious, google is making a lot of money from millions of boring internet addicts clicking away coz they are bored and have nothing else better to do but worse internet can be an addiction just like smoking.

so if google really monitor IP addresses and their number of clicks to improve quality, you can surely bet profits will drop.

Thus, do you think google will do anything to dent their own profits?

China: What a Real Bear Market Looks Like

Many Chinese public listed companies are interlinked in their investments thru cross holdings and in the past many companies derived substantial profits from these shares.

As such, as equity prices have decreased sharply, in the near future, a lot of companies will also report lower profits. It is a vicious circle!

China: What a Real Bear Market Looks Like

Many Chinese public listed companies are interlinked in their investments thru cross holdings and in the past many companies derived substantial profits from these shares. As such, as equity prices have decreased sharply, in the near future, a lot of companies will also report lower profits. It is a vicious circle!

Catching the Next Bubble

what current alternative energy technology is out there?
nuclear (is already in the picture)? bio-fuel (will cause food prices to spiral out of control until it crash)? battery for cars (any breakthru technology?) solar & wind power (again linked to battery technology and the need for large real estate for such farms)?

in the foreseeable future, there isn't the technology to sustain a rally in the alternative energy. it would be like the bio-tech rally, offering so much promise but delivering so little at the end of the day for investors. so becareful!