After nearly 30 years of prosperity and development, the world economy stepped into the most severe financial crisis since the 1930s. 2008 appears to be in a rerun of 1929, in order to avoid making the same mistakes of that crisis the governments don’t spare any effort and invest huge sums of money to save a the patient suffering from terminal illnesses. However, with the escalation of the crisis it seems that the low point of this situation is still ahead of us and 2009 is bound to be a very tough year.
The global economic crisis will surely make the world economy a more volatility. Whenever the world economic downturn, there would always accompanied by the tense situation in around the world and frequent regional conflicts, particularly in the second half of 2008. Bush’s time also marked the end of the era of the United States initiated as the unipolar superpower which maintain the world order to decline, combined with the United States in recent years, as a superpower and influence began to decline in 2009 will return to the world into riskier period . In addition to the economic crisis the US and other G8 countries find it is difficult to face such the war in Iraq and Afghanistan, Iran and North Korea’s nuclear issue, India and Pakistan tension, Israel and Palestine, and so the escalation of the conflict, crisis and war in 2009 Will continue to play a leading role. At the same time as the economic recession and high unemployment rate of the country’s internal social conflicts and political instability. This social and political instability will, in turn, constrain the economic recovery process.
In 2009 the world economy’s center of gravity is not re-economic recovery hopes, but whether they can successfully prevent the economy from recession becoming into a depression. The crisis is not only a prosperous 30-year structural adjustment beginning as well as a “de-leverage” in the process, the resulting economic recovery is bound to return to the difficult and tortuous. In particular the “de-leverage” of the current economic downturn is the main driving forces of over-indebted households and the lack of capital financial institutions is bound to adjust their income and expenditure structure, increase savings and loan restrictions become inevitable, so before the end of this process, Could not have sustained recovery. In addition, following the real estate sector, financial services and the automotive industry in trouble, do not know what the industry will need government aid, the busy emergency financing to promote economic recovery is bound to reduce efficiency. In short, these are a critical times and markets will be too optimistic.
In 2009 the investment environment filled with pessimism. First of all, the global housing bubble burst is far from the being ended , the overall contraction in the economy led to the instability of employment and income decline, loss of housing and effective support, and, in the past, experience has shown that the real estate market recovery will take at least 26 months, housing Prices and sales will continue a downward trend; Second, the stock market in the world in 2008 hit a historic encounter, the average annual drop of a record 44% in 2009 dim the prospects for investors more cautious about the stock market rebounded sharply, it is extremely unlikely ; Again, as the world entered the era of low interest rates, deposits and bonds, the yield will be significantly reduced, and excessive money supply will once again lead to inflation, thus eating into limited income; As for financial derivatives, investors, but as a scourge Fear to avoid any connection.
Despite the poor environment, energy and commodity prices may be a significant rebound, although the economic downturn and weakening demand, but in the face of a price collapse in 2008, suppliers to start production in order to stabilize prices, the most important thing is that China and India, and other emerging economies are going through The course of industrialization, in the long run, demand will continue to rise while the supply is limited, so prices will slow the momentum of the recovery. Gold is still against the best choice to hedge market risks, the United States over the past few months in response to costly financial crisis, resulting in money supply and increase the level of debt, which is bound to undermine the inherent value of the dollar, while interest rates have come down in other countries also appear Exchange rate fell in under the pressure of currency depreciation, capital flows may be gold, hedge its functions will be to provide price support. Brewing in the foreign exchange market more opportunities for currency exchange rate is the ratio between the relationship between economic prosperity, compared with currencies of the country’s economy which is better, and the contraction in the economy, compared with the devaluation of the national economy which is even worse, Therefore, the price of the difficulty of grasping the trend of relatively low world power in the formulation and implementation of the plan to stimulate the economy, is bound to consider and to maintain exchange rate stability, and in 2008 fluctuations of the exchange rate is very difficult in 2009, investments and transactions To substantially reduce the risk, the band of the same operation will generate substantial revenue.
2009 investment strategy is to maximize the proceeds from the pursuit of minimizing the risk to the pursuit of a gradual shift. After all, when the economy is, the bullish atmosphere, can be more optimistic as far as possible, the more revenue; and the economic downturn and the atmosphere bearish, as far as possible, the more pessimistic about the effective loss of control. Regardless of what market conditions, there is always an opportunity there, so it appears that they are up idle funds would be unwise.
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