Friday, February 20, 2009

SOS World Economy


MyView
OK the problem is not going away in 2009 or 2010. This is bigger than anyone thought of, so it will last longer than we would like to believe. The USA over consumption and over spending and over gearing (derivatives) was not built up over one year but over a long period of time (10 yrs at least). In short, it takes a while stabilised.
Of course, the next on everyone's mind is what shall we do?
My view for next 3-5 yrs (for Malaysian only) or longer
  1. crude oil
  2. gold and silver
  3. agricultural producer, ranging from coffee, corn, cpo, sugar,
  4. industrial metals, copper, aluminium, iron ore
  5. high dividend yield stocks (Singapore, Australia, NZ, HK)
  6. diversify currency (Yen, Yuan, AUD)

Pssst. Actually the figures above is understated on the derivatives, it is now in Jan 2009, it is about USD600 trillion, say world GDP is about USD60 trillion, it should be about 1000%, not 802%. What happen when world GDP shrink?



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