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Grab Some Cover from More Incoming BRICs

Posted by Larry Doyle on June 17, 2009 6:02 PM |

While all eyes domestically are seemingly focused on the financial regulatory reforms coming out of Washington, news of much greater long term impact is hitting us half a world away.

Take cover!! Shots from one BRIC nation after the other are coursing across our landscape. Don’t think for a second that Washington does not feel this heat. The mere fact that the media largely dismisses these stories is not surprising. In fact, the media’s approach of generally overlooking these developments is remarkably consistent.

Be careful . . . and let’s review the following:

1. Bloomberg reports: Russia, China to Promote Ruble, Yuan Use in Trade

plus

2. The Washington Post writes: Beijing Orders ‘Buy China’ for Stimulus Projects

plus

3. Yahoo News offers: China Sells U.S. Bonds to ‘Show Concern’

plus

4. Breitbart provides: Time for ‘New World Order’: Brazilian President

There is little doubt that stories of this magnitude and measure were released in a very coordinated fashion. Recall that the BRIC (Brazil, Russia, India, China) Summit in Yekaterinburg just finished.

By the way, how do you think the U.S. dollar did today?

The Wall Street Journal highlights: Euro, Yen Make Gains Against Dollar

and

Breitbart adds: Dollar Drops on Reserve Currency Doubts

If our dollar were to continue declining in value, that is the precursor to inflation. For those who maintain that our economy is too weak with too much slack to spark inflation . . . welcome to stagflation. Who has thoughts about that?

InvestmentNews reports: Roubini Warns of Stagflation

In connecting these dots, I look at this onslaught of activity and coordinated news releases and think, “just because you’re paranoid, does not mean they’re not out to get you!”

LD

This entry was posted on Wednesday, June 17th, 2009 at 6:02 PM and is filed under BRIC, General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

  • fiscalliberal

    I wonder if it is not the case of economic reality that if you print all that money, that the decline of the dollar is inevitable. Why would one continue to invest in the dollar if you knew it was going to decline in value. We should check to see if Soros is not shorting the dollar some where.

    More over, it could be that the U.S. is recognized as a paper tiger who cannot get along without massive foreign investment in our bonds.

    So – when it is all said and done, it could be that they are not “out to get us”, it is more a lack of confidence in our ability to manage government and business. Certainly a lot of us share that lack of confidence.

    While we have massive military power (on paper) and we can make a impressive short term display of power, our ability to sustain anything is limited.

    We just are not the military threat we once were. We still are mired down in Iraq, Afghanistan and dabbling in Pakistan. Reality says we are not capable of participating anywhere else. The Mideast is a powder keg with Israel and the Arab states.

    Hopefully our government can get the Financial Mess resolved, until then we can expect more of the same in terms of what LD is pointing out.

    None of this should be surprise to anybody. We are lucky to have a Sense on Cents blog capable of getting out in front of the story.

  • TeakWoodKite

    fiscalliberal says: We are lucky to have a Sense on Cents blog capable of getting out in front of the story.

    How true.

    and now back to the “Yellow Weeds” . Roubini, whom I respect and find informative to listen to, is wrong, I believe about the un-enjoyment going down anytime soon.
    What does he base his forcast on in this regard. Stagflation is not job friendly, as I recall from the Nixon years.

Larry Doyle

Larry Doyle A Wall Street veteran's views and instincts on the markets, economy, and all things financial.







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