Commodities surging like no tomorrow, yet central banGers see no evil. There WILL be a point where the manufacturers can NO LONGER absorb the hike and be forced to hike prices of their products! Nobody knows where is the tipping point when this will happen. I am the first to admit it. But, with raw materials going up in such HUGE % even in dollar terms, that point is getting nearer NOT further. Actually, commodities out run ALL paper currencies. This is a reflection of poor money management skills of the banGers who prefer to have inflation rather than unemployment.
Once the tipping point happens, ALL manufactured goods price will move UP. non-core inflation moving into core inflation. By that time, I bet that the central banGers will have to take a lesson from my favourite FED chairman, Paul Volker, and hike rate till 15%!!!
So, raise your holdings in CASH and get ready for the NEXT big thing, HIGH interest rate!!!
And of course, CASH comes in many forms, like USD, SICKapore dollar, Loonie, Aussie, Euro, etc. Pick those currencies whose host do not have large account deficit, show large surpluses, strong balance sheet as a country lah. So, USD is OUT! Euro is frankly in fairy land (I still believe Jean Trichet will CUT when he sees what the strong Euro will do to the employment rate). SICKapore dollar is not that bad a choice to me.
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