USD continued downfall until it hits bottom in 2005. Bottom is not hit yet! 10% to 15% more room to go. Until significant improvement in the twin deficits which did not yet happened. Under-expectations inflation rates. Every body waits for high inflation, it won't happen. Look for those surprise days where there are no interest rate increases when everybody expected one... Don't have a clue about gold. I would stay out of it. It seems very high. Oil will drop back to the 30$ level. Too much producting countries nowadays, everybody wants to get a bigger share of these high prices, so they all produce more in secret... God bless competition. Look for possible bounce back of the techs stocks and computers/software and internet stocks. Theses are luxury products, which means they have a greater variance than the GDP. The whole world expect strong economic growth. Plus the average computer in america is 4-5 years old, time for an upgrade. Time for these commercial digital video clubs on the internet. Btw, expected growth rate are surprisingly high. Guess is, as always in these cases, look for under-expected growth rates. In strong growing countries, China of course, India even stronger than China, unsuspected Canada which grow strongly for 10 years without yelling it out loud, technicaly didn't have a recession since 1992. Europe ride down to hell and to the abyss of nothingness. Japan... nobody knows what's up with Japan. Housing bubble bust. Time to sell your house and even short your neightboor's house if you can Women's boobs should grow bigger cause of all these hormone-enhanced farm animals we eat. These have opposite effects on penis size so be careful. I look for 100% success rate in my prediction, or 100% wrong. Anything in between will be unacceptable
This is a great list. The comment on softs is much, much too broad. Coffee looks great, but other markets have been and will be more boom 'n bust. Note China ag production is finally beginning to experience the productivity revolution the West experienced 50? years ago. Soybeans for example, of which China had a record crop this year. China will be a net UN food donor next year, for the first time in its history. To this list I will add the Gold price of Oil, or Gold/Oil. This ratio hit record lows about a month ago & should continue to chop higher. In other words, extraordinary events aside, Gold should outperform Oil, though I believe upside bias predominates w/ both.
Another ratio trade is S&P500/Gold -- how many S&P500 to buy 1 ounce of Gold. According to a chart I saw, this ratio at the height (1980's I think) reached about 4 and made a multi-decade low few years ago and has been climbing. At less than 0.5 ratio (still close to bottom), Gold is still relatively cheap compared to S&P500. This is one possible trade I am looking into as I am also bearish stocks. The question is whether the Gold rally we are seeing is a bull or bear market rally.
What's the best way to play a downturn/recession of the Chinese economy? Is there a tradable insrument available to people living outside of China? I would think the HangSeng (HSI Futures @ HKFE) would be correlated...is there any other direct way?
Currencies =================== Stronger dollar from higher US interest rates? Nice theory, but have you noticed that the entire US yield curve has risen substantially since early '04, while at the same time the dollar has gotten its butt kicked? Whatever has been causing the Dollar to slide since Oct occurred in the face of rising interest rates and there's no reason that it won't continue to pressure the buck. US Stocks =================== The profit picture for US companies will come under serious pressure early '05 due to the current major flattening of the yield curve combined with a finance-dependent economy. Interest Rates ==================== Inflation will remain low and the resulting trend higher in long bond prices will bull-flatten the yield curve.
I saw HHI.HK is available at IB. I've added it to my quote list and will monitor it. This should be more direct for China than HSI. Thanks.