The Global Economy: What You Need to Know
Wednesday, November 5th, 2008
By George Leong, B.Comm. for Profit Confidential
Halloween just passed, but we still sense there are some gloomy days ahead of us that could put a scare into most investors. By the time you read this, the next President of the United States will be known and then it will be all business, as the new administration works on the transition in the White House and the serious need to fix up the ailing U.S. economy and all its problems.
It will not be easy and we will be met with numerous hurdles, many of which will not be controllable from the U.S. Already, there is increasing evidence that the economic behemoth China is showing growing pains and in fact is in trouble. Interest rates were just cut to try to avert a slowdown, but the fear is that, if China slows, there is going to be a domino effect worldwide. Oil demand in China is predicted to fall to zero percent growth in 2009 versus the previous four percent, as the country’s economy struggles, according to research by Credit Suisse. There is now increasing worry that China is also headed for a major slowing, much worse than many are expecting — and this is not good.
Japan recently saw its benchmark Nikkei 225 index drop to its lowest level in 26 years. We are seeing major economic problems in Russia, as oil falls towards $60.00. The Russian economy was largely driven by wealth in the oil fields, but with prices down well over 50% from July, the government there is facing extremely difficult times and struggling for solutions to deal with the new lower oil price environment. Russia is more vulnerable because of its dependence on oil prices and due to the lack of diversity in its businesses. A severe downturn in Russia could impact other emerging eastern bloc countries because of the influence of Russia.
So, before you jump onto the bandwagon, be aware of the global problems, as they will impact the United States.
Next Post: The Big Day’s Over — What Next?
Previous Post: Good Morning, Mr. President
Tags: china, global economy, interest rates
Tweet
Sign Up for PROFIT CONFIDENTIAL and
receive a FREE copy of our exclusive report:
"A GOLDEN OPPORTUNITY FOR STOCK MARKET INVESTORS"
We respect your privacy and
will never share your e-mail address.
George is a Senior Editor at Lombardi Financial, and has been involved in analyzing the stock markets for two decades where he employs both fundamental and technical analysis. His overall market timing and trading knowledge is extensive in the areas of small-cap research and option trading. George is the editor of several of Lombardi’s popular financial newsletters, including The China Letter, Special Situations, and Obscene Profits, among others. His trading advice on stocks and options is also found on his daily trading site, Daily Profits. He has written technical and fundamental columns for numerous stock market news web sites, and he is the author of Quick Wealth Options Strategy and Mastering 7 Proven Options Strategies. Prior to starting with Lombardi Financial, George was employed as a financial analyst with Globe Information Services.
