Over the past six years we have witnessed a very unconventional approach to monetary policy throughout the world, with a goal of fighting deflation. As the unwinding of the Large Scale Asset Purchase program proceeds in the US, capital (which has no nationality); will indeed search for a safe home. With that being said, I also believe we will witness minor capital flight between various economies during the uncertain times ahead. Currently, in the US economic conditions "Appear" to be getting better, with an increase of 2.5% annual rate in real GDP in the second quarter of 2013; growth has proven to be somewhat more sustainable with minor offsets from the accelerating imports. If growth rates persist at these current trajectories, unemployment rates shall fall more inline with the Non-Accelerating Inflation Rate of Unemployment (NAIRU). Although I will personally admit the growth we have been recording is somewhat murky on the consumer side, with the majority of profits going to business! Over the ensuing months the risk on strategy will more than likely ease more, in turn removing some of the froth from the US equities markets . I also believe the commodities trade will overheat in the latter part of the fourth quarter of 2013.
Posted on: Mon, 09 Sep 2013 02:06:37 +0000
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