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Bonds and debts in europe
Mar 10, 2009 02:31AM
There was an interesting article yesterday in the globe& mail about companies all over rushing to raise cash in europe before the market gets flooded with them by various countries by year end.
It`s my opinion that another type of cash crunch is to come before 2010 when when all the loaners start raising interest with inflation fears and bonds start looking like junk but i`m no expert and this is more intuitive then analysis.
Sunday China anoounced it`s intention to move more into short Us bonds rather then long (chinadayly.com) , they`re caught between a rock and a hard place being so deep into US bonds and trying to figure out how to move their assets without being crunshed. My humble opinion again that they`ll have to move into US equities all the more which is at a discount of course, but for good reasons .
China`s next step after US equities should be to diversify into specific world currencies as they hope for more currency stability in the future. That won`t happen overnight, it will be a long process but it`s already on the way and even though they pretend they don`t trust gold because of it`s down side when the economy get`s better they still plan to add nearly another 100 $US billions to their reserve in the near future.
My opinion again they go about their business as quietly as possible in order to avoid spooking the markets even more.
The point i`m trying to make about this, is what goes on all over the world is spelling inflation in capital letters for many years to come, and as it goes gold will soon get a big push from it as Merril Lynch said a few months ago.