Credit Crunch Investor

A Depression and Recovery in Internet Time

Emm ... because communism failed in the early '90's, and Asia and the former Soviet bloc are now market economies, the world somehow has no choice but to support the US and the US dollar? I've got news for you - free market capitalism was not an American invention, and can survive without the US as the centre of the global economy.

The genuine recovery that we will see will be based on a rebalancing of global demand away from the over-indebted US consumer and the emergence of China and India as the new super-powers

Maybe the Bond Market Is Right

I'm not so sure about the "...bottoms in yields don't come during economic downturns" argument. In Russell Napier's "Anatomy of the Bear" (an analysis of the bottom of four bear markets - 1921, 1932, 1949 and 1982) he concludes that "a recovery in government bond prices precedes a recovery of equities. In 1932, equity prices bottomed seven months after the government bond market. In 1921, 1949 and 1982, the lags were 14, nine and 11 months respectively". Thus, on the past history of major crashes, we should expect Treasuries to fall and yields to rise as the downturn continues.

Chart of the Day: Bonds' Reversal

Yes, I first bought into this thesis at the beginning of November, but quickly sold TBT again once the 20 year bond started to rise.

I have recently bought into TBT again, but feel this is very much a momentum play - I'll be out again quickly if the trend reverses.

Two Asian ETFs for the Really Long Term

Yes, I like EWS too - with that yield, who needs capital growth?

Return of Weimar Monetary Policies?

What do you invest in to counter raging inflation?

At the risk of being highly unoriginal, the answer has to be ... GOLD

Of Wars and Strategic Metals

Interesting to note a large insider purchase in Titanium Metals Corporation (TIE) on 15th September. I've recently bought some myself.

Credit Crunch Invester

Sell the U.S. Dollar into Strength

Yes, a good article, and containing much I can agree with - but, fundamentally wrong, I think, for the next few months. I believe that we will see sustained US dollar strength for a while, at least against the euro and sterling, because, while the Fed cannot raise rates, the ECB and MPC will shortly be forced to lower them. I agree that the US economy is a basket-case, but, as such, it is further along the road than other economies, which will now feel the impact of declining export orders (as domestic recession causes the US trade deficit to shrink). Oh, and if you want to see an economy that is a REAL basket-case, take a look at the U.K., which has no industry left other than selling houses to one another (I should know, I live there).