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negative growth in economy as early as third quart
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aloha@
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21-Mar-2007 00:34
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What will be the impact on local stocks? |
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maxsyn
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20-Mar-2007 23:09
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Peter Oberois Mar. 17, 2007 The world stock markets were rising with hopes that the emerging economies will absorb the deflation and underemployment of the US,Japan, and Euro Zone economies. But things now look entirely different. The rapid growth in China and India has brought hyperinflation back with huge disparity in income levels and uneven distribution of wealth. China and India both are concerned. China raised interest rates for the third time in 11 months to curb inflation and reduce asset bubbles in the world's fastest-growing major economy. The Indian Prime Minister has vowed to take all possible measures to curtail the rapidly rising inflation. But no one understands that the inflation getting registered in these countries and in the Western nations are driven by debt. Debt driven mild inflation is actually deflation. By borrowing and spending consumers shift the deflation to the future. Eventually when they cannot service the debt in the future, everything will collapse. In the middle of all this China and India are rapidly raising the rates following the Federal Reserve. This will just get the deflation started. People will not be able to service the debt. They will have to cut down on debt loads. Recent collapse in Dollar in the middle of housing slow down and mortgage defaults bearish for Dow, S&P and Nasdaq - negative growth in economy as early as third quarter |
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