Markets are reacting today to the news that China has taken over Japan as the second largest economy and will surpass the United States as the world’s largest economy within 20 years. Jon Nadler pointed out in his metals update this morning that the U.S. dollar was lower and the euro gained, while gold was up a bit. He also said that Japan and China could flip-flop for the number two spot in the economy as seasons and metrics used to calculate GDP change. (more…)
The third quarter for currency traders looks to be another rocky one, according to Forex.com, which released its Third Quarter 2010 Markets Outlook today. A weak economy and troubles in the Eurozone are the usual suspects that will continue to hold the forex markets down. Analysts say the dollar will be the safe-haven currency as euro weakness will continue into 2011. The commodity currencies, the Australian dollar and Canadian dollar, should outperform, but are at risk if global recovery falls, according to the report. (more…)
The outcome of the Commodity Futures Trading Commission‘s recent 10:1 forex leverage proposal is still in limbo, and forex dealers and traders (including many Futures readers) are still busy hurling their wrath at the agency until the comment period closes on March 22. But in the meantime, GAIN Capital/Forex.com released their outlook for forex markets for the second quarter of 2010. And the forecast is a muddled, choppy one. (more…)
Speaking at the Optionetics “Oasis 2007” seminar last week in Santa Clara, Calif., investment guru and commodities bull Jim Rogers provided his insights to a three-year trip around the world he took with his new wife, Paige Parker. He said his biggest return from the trip was his first child, a baby daughter. Rogers noted he never had children before because he didn’t want the bother, but it was his best experience to date and recommended everyone go out and start working on babies right away.
More seriously, Rogers gave his view of the world, stating that China will be the country of the 21st century, just as the United States was in the 20th century and Britain the century before that. He noted China had the “the best capitalists in the world,” despite being a Communistic country. In fact he alluded to moving his family to Asian soon. “China will be the next greatest country in the world, whether you like it or not.”
Other Rogers’ comments:
• Teach kids how to speak Mandarin. He said his nanny is Chinese and speaks only Mandarin to his baby girl, so she already is bi-lingual.
• Right now the Chinese shares market is in a bubble; don’t buy shares right now (although he couldn’t recommend when to buy it). He also noted he has huge amounts of Chinese stocks but wouldn’t say what despite intense audience questions.
• Although U.S. dollar has been the world’s reserve currency, the United States’ is the largest debtor in the world, owing the world $13 trillion, adding $1 trillion in interest debt every 15 months.
• It is terrible policy to debase the $ in the long run, history has showed this.
• Stay away from bonds unless you know how to go short.
• Stocks will be in a big trading range for several years.
• We are in the middle of a bull market in commodities, which is the second largest market in the world (only currency market is larger).
• Oil reserves are dropping. In fact, Indonesia will become an importer of oil by the end of the decade, which means it will be kicked out of OPEC, an exporting cartel.
• Best alternative fuel is nuclear, which is clean if controlled properly (This is a big if…even the United States has had problems in this area; imagine less developed countries control.)
• Biggest danger in the world is the water problem, or lack there of. He did recommend NOT to buy water as if and when it becomes serious, politicians will take it over.
Rogers new book, “A Bull in China” will be released soon. It will be based on his observations of his round the world trip.
