Stock markets are not recovering pe se, volatility is sill there; this is short term trading, lead by big institutional players. So their books look good for the the first quarter of 2009. Market rallies? On what good news? None. Japan’s jobless up, Germany’s jobless up, US consumer confidence and housing still collapsing. They are sucker rallies and as mentioned in US stocks over sold in bear market rally, I was correct as there will be sell off’s and there was on Monday 30th 2009 when the Dow dropped 254 points.
The G20 will be a bun fight as each country is going to try and figure out how they are gong to protect their capital without following the American path to bankruptcy. Namely protecting what little value they have left in their own currencies. The US with the OECD and IMF behind them do not want to see the USD lose it’s footing as a base currency for the world. China, Russia have showed concerns and would like to see a broader based currency to replace the USD. Will this happen? Well think price collusion in a deflationary sense, now thing about price collusion with a deflationary spin from country to country. What does that mean? Well the US will try and destabilize currencies to protect it’s own, the only way they can do that is to depress the other currencies. How? Well an attempt to try and get them to agree to start quantitative easing, which means dropping interest rates and printing money. This would depress all the currencies pretty much at the same time, hence keeping the USD as the base currency. Why replace it when all the other currencies are just as terrible. What’s in it for the rest of the world? Well the US wants to emerge out of the global recession first. A theory that the world needs them to restart consumption again. A dangerous and arrogant disposition. Especially with the the Federal Reserve buying treasures, yet housing is still terrible, which would indicate that Fridays (3rd April 2009) jobless (US) claims will be bad. The US dollar will continue to tank. And China’s investments in the US may not be paying off, there could be a massive sell on the USD in 2009