-- Posted Thursday, 28 July 2011 | | Disqus
The June and July months (every year) are periods of low volatility for global financial markets. August sees more new events and is a little bit more volatile than June and July. But the first year of the second decade of this century is keeping every one on their toes. Summer is a period of rest for global financial managers every year. 2011 is just the opposite as every one has been kept on their toes.
This summer is not summer for the global financial markets courtesy US and European politicians. As July comes to an end US politicians are wrangling among themselves over the passage of debt limits and means to control US debt deficit. The so called “American Cause” seems to have forgotten among the American politicians. Ever since USA became a super power (after world war II), the “American Cause” has united American politicians and American people. All the wars such as Vietnam, Iraq, Afghanistan etc and further the war on terrorism have been supported by American law makers for an American cause. But in July 2011, they seem to have forgotten the American cause and the squabble.
It is for this reason that there is a danger of the US treasury credit rating getting downgraded from “AAA” to “AA” and below. The US dollar is weaker, gold continues to rise to new all time high against the US dollar with global stock markets trading with a softer bias.
The European politicians and central bankers are not united over ways and means to support Greece debt and other member nations with chances of a sovereign debt default. They are just resorting to short term measures to get over sovereign debt crisis of member nations while ignoring long term implications. They just want to calm the markets in the short term so they can enjoy the summer vacations.
The US and European politicians and law makers are enjoying the summer and they have kept the rest of the world on the edge gasping for breathe every now and then. The Euro against the US dollar is rising due to interest rate differentials. The current act by US and European law makers has resulted in investors loosing faith in currency markets. This summer is an early warning signal of the things to come this decade which implies (A) A closed world with more emphasis on bilateral trade than the current multilateral trade (B) Protectionism (C) Further erosion in the value of the US dollar (D) The race to be a new super power (from USA) among the emerging nations and developing nations. (E) The control for natural resources such as metals, food stuff etc will rise. (F) The “m” trade OR mobile trade will rise and will also increase financial markets volatility on over information. Gold and silver will rise and reach a bubble zone towards the end of this decade.
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice. Prepared By Chintan Karnani. Website www.insigniaconsultants.in
-- Posted Thursday, 28 July 2011 | Digg This Article
| Source: GoldSeek.com
