Yo
We have a huge federal deficit. We need people to buy Federal bonds to lend money to the government.
With the huge influx of money from the Fed in the past few months, foreign investors were squeezed out. Will they come back? The answer is not as simple as you’d think.
I’ll be writing more and more about this as the year goes by, particularly it’s impact on you.
J
The deficit levels of the Japan government are among the highest of the developed countries, and expected to increase in the coming years.
This is not good news for Japan. As the rating decreases, the extra premium paid to borrow money goes up. So, a 3% cost of borrow might increase to 4%.
Anyway, this is something to watch as the United States deficit to GDP is increasing rapidly.
CLICK FOR FULL ARTICLE – S&P DOWNGRADES JAPAN FROM AA TO AA-
Yo
The Euro has rallied against other currencies recently.
Do I think this is a short term rally? Yes. Do I think the Euro and Europe in general still have long term problems? Yes.
CLICK FOR FULL ARTICLE – JUST WHEN YOU THOUGHT THE EURO WAS OUT
Every wondered what the 2008 Financial Crisis was all about? The Big Short by Michael Lewis is a good, gripping book that explains much of it. I highly recommend it.
But what are some of the lessons we can take from this crisis as outlined in the book?
That’s what this week’s video is about.
Take 4 minutes to watch/listen to it.
Overall though, equity debt is much below market peak levels.
This could fuel equity markets and be a nice bullish sign for us.