Commodity Trade Mantra

Posts Tagged ‘Emerging Economies’

Emerging Market Meltdown May Plunge Global Economy Into Recession

When the Fed effectively telegraphed its new reaction function last month, the FOMC served notice to the world that it was not only acutely aware of what’s going on in emerging markets, but also extremely worried about the possibility that hiking rates could end up triggering something far worse than the “tantrum” that unfolded across EM in 2013.

Why the Fed Would be Insane to Raise Rates: The Rising U.S. Dollar

What happens when the Fed makes the US Dollar more attractive to global capital? Capital flows even faster out of emerging economies and China. The tidal flow of capital out of emerging markets and China threatens to surge into a veritable tsunami should the Fed raise rates. What happens as capital flees emerging markets and China? Lots of bad things.

BRICS Bank Officially Launches As Sun Sets On US Hegemony

On Tuesday, ahead of this year’s summit in Ulfa, the BRICS countries officially launched the new bank along with the reserve currency pool. Brazil, Russia, India, China and South Africa (BRICS) will also look to begin settling more trade in national currencies. The Chinese yuan as the leading currency can be used in settlements among BRICS member states.

Avoid the Next Global Financial Crisis - Invest in Gold

The ultimate conclusion to the events now unfolding will take the world in one of two directions: an economic meltdown, or a dramatic re-correction. Gold, too, will struggle temporarily, if only because of the shock factor. But just as it did in the last crisis, gold will gather its bearings & prove to be a safe haven for shell-shocked investors & savers.

The Biggest Economic Story Going Into 2015 Is Not Oil, But Emerging Markets

Emerging markets today are half the world economy. Much of what happened in global credit markets, especially in emerging markets, was based on cheap, easily available dollars, which has ended. It used to be said that when the US economy sneezes the rest of the world catches a cold. Now it seems all we need is a hiccup in emerging markets.

Stock Index At Record High And Rupee Strength Makes Analysts Like India Now

Despite India’s troubles over the past few years, more recent economic data indicate that India is heading in the right direction. India has a very good future. All we need is to make some reforms to allow growth at the pace that it should be growing. This is an economy that should be growing at 6%.

The Problem With Credit Booms Is That They Are Followed by Busts

Research on private sector credit booms over the last 20 years show that whenever credit to the private sector expanded by 30% or more within a 10-year period, a banking crisis & recession resulted without any exception. Credit booms always end badly & last longer than rational minds expect.

Goldman's 5 Key Questions For Janet Yellen

Fed Chair Janet Yellen is likely to stick to the script in her inaugural monetary policy testimony but Goldman looks for additional color on: 1) Recent patch of softer data 2) Fed’s thinking on EM weakness 3) Hurdle for stopping taper 4) Amount of slack in labor market 5) Future of forward guidance

Is The Emerging Market Growth Story Over?

There are a large emerging economies that are slowing which raises the question as to whether the emerging market growth story is over, with investors pulling at least some of their money out from these countries.

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