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-- Posted Sunday, 5 April 2009 | Digg This Article | | Source: GoldSeek.com
Now that the G20 summit is over all the good news is priced into global stock markets. The rally is therefore almost over, although markets might drift sideways for a while. Then markets will really take a tumble with the Dow bottoming out at 4,000 later this year and the FTSE dropping to 2,000. Gulf stocks will trend lower but have fallen so far that there is not so much further that they can fall now. G20 hope You could see the Dow Jones tick higher as President Obama delivered his wind up remarks to the press in London last week. The G20 was indeed a climactic conference - with a great deal of hope and spin - but markets will now deliver an assessment on whether anything of substance was achieved. Aside from a useful $250 billion commitment to the IMF it was largely hot air, and the trumpeted $1.1 billion in total bailouts simply a restatement of initiatives already launched to ’save’ the global economy. However, the world economy is not going to be saved from a huge slump this year. Singapore has announced it expects a 10 per cent crash in GDP, the predictions are for a seven per cent fall in Germany and nine per cent crash in Japan - the world’s second and third largest economies. This follows a contraction of global trade on a scale not seen since the Great Depression of the 1930s. To expect a quick bounce back to ‘business as usual’ is simply and quite self evidently unrealistic. It is impossible for major economies to recover that fast. Stocks have rallied on false hopes. Credit markets tell a different story and are still locked. Businessmen seldom trust politicians and their economic forecasts, and they should beware of the G20 leaders. Those offering quick and easy solutions to serious problems are usually quack doctors. Banking problems That is the other problem. These bailouts are sticking plasters to cover up the initial disaster and keep the patient alive. The far more difficult job of sorting out the global financial industry has yet to start in earnest. This has to be done, and stock markets will have little patience. The shorts will go back on. The downward pressure on financial sector equity will resume. The good banks will have to be saved and the bad slaughtered. Sadly the multi-trillion dollar bailouts will make this a longer and more expensive process than it needs to be, and cause a great inflation. Stock markets are not going to like any of this at all. Gold and silver will be the only places to hide.
-- Posted Sunday, 5 April 2009 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
 Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
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Dow to fall to 4,000, FTSE 2,000
