Financial Markets Begin to prepare for a World of Inflation once again
Financial Markets Begin to prepare for a World of Inflation once again
Inflation! Have I lost my mind? Actually, no... Let me explain what I mean.
Former central banker Volcker (who is on Obama’s economic team) is prepping the world for deficits of $2 to $3 trillion dollars as the U.S. goes into one of the biggest spending sprees that (believe it or not) will make George Bush’s spending look like child’s play.
The financial world is listening. They’ve seen the leading indicators of the economy in the beginning stages of perking up. They’ve seen stocks stabilize and they’ve seen the down draft in commodities halt.
Commodities are pointing the way (ahead of time) to an inflationary environment that is coming!
In fact, some of the most convincing arguments for the coming inflation are what is transpiring in commodity prices lately.
For instance, the downtrend in gasoline futures has been broken and the cheapest gas prices are now behind us. This is largely due to the stabilization of oil prices of late. Oil appears to have found a floor around the $30 to $40 a barrel range. It may take some time to consolidate at these levels before oil and gas move materially higher, but money is made by being a bit preemptive about coming moves, rather than getting in them once things are obvious to everyone.
Another sign of inflation that has crept up on the radar screen has been the sharp move higher in gold prices. Yes, of course some of it has been brought about by the fears in the economy. However, much of the latest moves higher have been on the thought that the Obama administration will finally turn the tide for the economy and get us back to an “inflationary, growth” mode.
Gold recently broke a short term downtrend line or what technicians would call a “neck line” on a bullish inverse head and shoulders chart pattern. I think you will see gold easily run up to the $1,200 to $1.500 before the end of the year.
Another commodity that traders say has a PhD in economics has recently bolted higher in the short term too. That commodity? Copper. So why the PhD status among traders? Here’s why. Copper is a major commodity used in residential and commercial construction. It’s also used in electronics and automobiles among other things.
So since this commodity is so broadly used, investors watch this commodity as a barometer of strength and growth coming to the U.S. and even the world economy.
One thing you have to remember is that corporations ramp up their inventories just before they think they will need them. Therefore they buy just ahead of the demand increase by the retail and corporate market demands it.
Learn to think like the “forward looking” institutional investor and not like the retail investor… that is always “late to the ball game”!
So once copper starts the process of perking up, as it is now… it starts investors back in the offensive mode and away from the defensive posture in their portfolios. This change up in many institutional portfolios is beginning now before the retail investing public realizes that they should do the same.
You see, the retail public waits until they can see the economy turning around “in the here and now”. In fact, they even wait a bit after the economy turns up “just to be on the safe side”. However, this delay is what causes the huge differences between the forward thinking institutions that gain a better pricing and the sluggish retail investor that’s historically always late to the ball game.
This “expectation” for inflation to resurface in the months ahead is also causing foreign currencies to begin to perk up and the U.S. dollar’s gain to slow down. This is yet another sign of a shifting that beginning to take place across all markets even though it is still in the beginning stages.
So prepare yourself like the big institutional players are. Buy with cash, no margin. That way you don’t have to “time” the exact turn around and incur a ton of margin interest while you wait. Buy broadly at first with ETFs or mutual funds. Don’t bottom fish in individual stocks because we are not to a place yet to where we know “who will survive” and “who will fall by the wayside”.
Financial Markets Begin to prepare for a World of Inflation once again - To learn more about this author, visit Sean Hyman's Website.
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I know this is a hard one to believe, being that we are obviously in the middle of a deflationary period, but savvy institutional players are already starting to position themselves for inflationary times ahead.
Inflation! Have I lost my mind? Actually, no... Let me explain what I mean.
Former central banker Volcker (who is on Obama’s economic team) is prepping the world for deficits of $2 to $3 trillion dollars as the U.S. goes into one of the biggest spending sprees that (believe it or not) will make George Bush’s spending look like child’s play.
The financial world is listening. They’ve seen the leading indicators of the economy in the beginning stages of perking up. They’ve seen stocks stabilize and they’ve seen the down draft in commodities halt.
Commodities are pointing the way (ahead of time) to an inflationary environment that is coming!
In fact, some of the most convincing arguments for the coming inflation are what is transpiring in commodity prices lately.
For instance, the downtrend in gasoline futures has been broken and the cheapest gas prices are now behind us. This is largely due to the stabilization of oil prices of late. Oil appears to have found a floor around the $30 to $40 a barrel range. It may take some time to consolidate at these levels before oil and gas move materially higher, but money is made by being a bit preemptive about coming moves, rather than getting in them once things are obvious to everyone.
Another sign of inflation that has crept up on the radar screen has been the sharp move higher in gold prices. Yes, of course some of it has been brought about by the fears in the economy. However, much of the latest moves higher have been on the thought that the Obama administration will finally turn the tide for the economy and get us back to an “inflationary, growth” mode.
Gold recently broke a short term downtrend line or what technicians would call a “neck line” on a bullish inverse head and shoulders chart pattern. I think you will see gold easily run up to the $1,200 to $1.500 before the end of the year.
Another commodity that traders say has a PhD in economics has recently bolted higher in the short term too. That commodity? Copper. So why the PhD status among traders? Here’s why. Copper is a major commodity used in residential and commercial construction. It’s also used in electronics and automobiles among other things.
So since this commodity is so broadly used, investors watch this commodity as a barometer of strength and growth coming to the U.S. and even the world economy.
One thing you have to remember is that corporations ramp up their inventories just before they think they will need them. Therefore they buy just ahead of the demand increase by the retail and corporate market demands it.
Learn to think like the “forward looking” institutional investor and not like the retail investor… that is always “late to the ball game”!
So once copper starts the process of perking up, as it is now… it starts investors back in the offensive mode and away from the defensive posture in their portfolios. This change up in many institutional portfolios is beginning now before the retail investing public realizes that they should do the same.
You see, the retail public waits until they can see the economy turning around “in the here and now”. In fact, they even wait a bit after the economy turns up “just to be on the safe side”. However, this delay is what causes the huge differences between the forward thinking institutions that gain a better pricing and the sluggish retail investor that’s historically always late to the ball game.
This “expectation” for inflation to resurface in the months ahead is also causing foreign currencies to begin to perk up and the U.S. dollar’s gain to slow down. This is yet another sign of a shifting that beginning to take place across all markets even though it is still in the beginning stages.
So prepare yourself like the big institutional players are. Buy with cash, no margin. That way you don’t have to “time” the exact turn around and incur a ton of margin interest while you wait. Buy broadly at first with ETFs or mutual funds. Don’t bottom fish in individual stocks because we are not to a place yet to where we know “who will survive” and “who will fall by the wayside”.
Financial Markets Begin to prepare for a World of Inflation once again - To learn more about this author, visit Sean Hyman's Website.
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
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Cheryl MatthynssensCheryl is a life skills coach, licensed Chemical Dependency Counselor and a 20 year entrepreneur. Cheryl's dedication to achieving a life of balance led to her expanding her teaching from the simple managing of life's daily challenges to adding financial well being as well. A direct marketer with DrinkACT, she is gaining ground in the online community with her concepts of making sure business owners, entreprenuers and employees have well rounded life styles. She opened up a small affiliate site - The Balance Guide- to help others find resources for mental and emotional well being. Visit Cheryl's blog to see more of the diversity beyond business she has began offering online at www.thebalanceguide.blogspot.com - Visit Cheryl Matthynssens's Website |
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