Tuesday, March 30, 2010
Key points made by Philip Manduca, Head of Investment of the ECU Group:
- The Euro will continue with it's sovereign debt crisis for awhile until the U.S. takes the spotlight with it's own debt crisis.
- When bond yields start rising on U.S. treasuries because of a belief that the U.S. cannot finance itself and someone has clearly stepped away from funding the U.S. Someone is no longer at the auctions they were at (CHINA), the U.S. will have a much bigger problem.
- The only way to deal with a declining job market in the West is to stop globalizing the world and try to deglobalize (protectionism).
- THE MOMENT TO LOOK FOR: WHEN THE S&P GETS UP THROUGH 1150 AND THE YIELDS ON THE 10 YEAR TREASURY START PUSHING THROUGH 4-4.25%, THERE IS A BIG PROBLEM.
- YOU'VE GOTTA BE LONG ON GOLD, GOLD IS THE CURRENCY OF CHOICE. THERE IS GOING TO BE DEBASEMENT AND FAR MORE QUANTITATIVE EASING TO TRY AND KEEP YIELDS DOWN (HYPERINFLATION / LOSS OF CURRENCIES' PURCHASING POWER).
- YIELDS ARE NOT GOING UP BECAUSE OF INFLATION OR ECONOMIC STRENGTH. LACK OF DEMAND WILL PUSH YIELDS UP AND THAT IS WHEN THE DOLLAR WILL FALL BIG TIME. THIS CAN HAPPEN IN A WEEK.
For now, those of us who do not want to be caught off guard by hyperinflation can use this time to make our investments and prepare ourselves for a currency crisis while the attention is on Europe.
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