This thread follows "A hope for the global economy (part 1)" http://groups.google.com/group/world-thread/browse_thread/thread/50e6bde7dcda3955#
and "How could be 2010" http://groups.google.com/group/world-thread/browse_thread/thread/e240c2d4778a976d# My comment: This is not a prediction yet, but we can see in the picture that it seems that the Baltic Dry Index consolidates its rise. I suggest to watch http://www.bloomberg.com/apps/cbuilder?ticker1=BDIY%3AIND clicking on Relative Strength and range 5 years (click on 5y above). We will watch that today Relative Strength -in the indicators row- is above 92 (scale 100) and also, we will see that the chart is drawing a shape like the letter U, and the bottom of that U is already behind us. This is why we called it a U-type crisis, as usual in economic crisis, versus V-type crisis that are usual in financial crisis. Hereinafter, authorities must watch carefully not just economic activity, but also inflation, because it could rallyif economic activity raises too fast. I have to repeat that this passes to Main Street in at least 6 to 9 months, and it uses to be one whole year. If finally this trend goes on, rebound in Main Street would happen probably in early 2010. Please, also read this article "Iron Ore Rebounding as Vale, BHP Face Cuts >From China (Update1)" http://www.bloomberg.com/apps/news?pid=20601087&sid=azc6MrwvxeFk&refer=home in particular this: "The tone of the iron ore market has definitely changed," said Ric Ronge, who helps manage the equivalent of $1 billion at Pengana Capital in Melbourne And this one "China Stocks Rise to Four-Month High, Led by China Cosco Gains" http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aHf559Hglp3c Also, I have to repeat that this scenario would not apply in full to some economies that, beside the global crisis, have their own local crisis such as some in Europe -UK, Iceland due to financial crisis or Eastern Europe, Ireland and Spain due to construction crisis-, USA due to fiscal, structural and financial crisis, and some commodity producers with large population which budgets lie above 30% or 40% on commodity exports such as Russia, Iran, Venezuela, and others. Also, some countries such as China are using this crisis to change its development model, that change could be finished within 2009 or not, if not probably the first half of 2010 would be hard yet. Also, we should not expect that India leaves this crisis too soon as it depends too closely on developed economies and it is not changing its development model. In my opinion, the areas where we will see more clear this rebound in 2010 will be Japan, SKorea, Latinamerica (except Venezuela and Ecuador), Africa, Middle East (except Iran and Iraq) and ASEAN (except Malaysia). I can forget some large commodity producers. If rise in global activity and international trade consolidates along next coming months, hopefully slowly, we should expect that it will push equipment and manufacturing in the second half of 2009 and in 2010 it will push consumption, goods, retail, consumer services, etc. In most economies not cited above, it will mean that their growth rates will be closer to rates that they had until 2008. It will affect price inflation that probably will rise again after this short close-to-deflationary time. As most of those economies will not be too large, the deflationary recession in Europe and USA and limited growth in those countries could neutralize each to other, commodities will rise slowly and it will produce some inflation but not too high. If China finishes its transition in 2009, global inflation, in particular related to comodities, would rally. If growth pass through contagion to US economy and the rest of Europe at the end of 2010, the hyperinflationary crisis would start. But this will be another message, if someone shows interest on that. Peace and best wishes. Xi --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
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