Feb 2014: Finance in Focus

Posted on 7th February 2014 by Trevor Reynolds in Finance in Focus

 

Well a lot has happened in the last month.  The Yen stopped depreciating and guess what the Nikkei lost about 2,000 points and it has seen Foreigners selling the most Japanese stocks last week since 2010 and before that since the credit crisis started to implode…

n 225 feb 2014

 

 

 

 

 

 

 

 

So what is next?  As said before whatever happens Japan is unlikely the place to be longer term due to the debt, demographic and political sinkhole that the “powers at be” have placed themselves into. Money invested outside Japan is likely to be more dependable than money invested inside Japan.

General corruption is causing places like Turkey, Thailand and the Ukraine to erupt into protests and riots. It will be interesting to see if these develop in to greater conflicts.  One question concerning the Ukraine is what will Russia do?  As they have been very quiet mainly due to the Sochi winter Olympics, I believe. Once this end (hopefully terror free) will President Putin is more perhaps much more forceful?  Bearing in mind about half of the Ukraine speaks Russian as the Eastern part of Ukraine was historically once Russia. We will have to wait and see what happens here.

Gold; stable but disappointing it has not been able to rise above $1,300 – my worry here is if we do not see a rise above it soon we may very well have to go back and test the lows once again …A month or two will give us the answer here. So far we have a double bottom at 1,140 and wait to see if that holds should gold dip lower.

The Dollar index has been flat but what this is really telling us is  base is being formed and the Dollar is about to show us strength.  The emerging markets are beginning to stress and this could cause more stress on the European banking system as they have over 3 Trillion loaned out to yes you guessed it, Emerging markets….if there is a European liquidity crunch like 2008 that will bring everything down (gold too) in the short term.  Just like in 2008-9 the dollar was the go to place.  One difference this time is the Yen is not so we should see much greater dollar strength going forward.

n dx feb 2014

 

 

 

 

 

 

 

 

 

 

Gold as stated earlier will find its bottom in 2014 and we believe it will rally to $3,000 or more in the next 5 years.

US markets — yes they too are falling but I believe they will stop, just have a look the S&P chart and note the channel it has popped out of unless the S&P falls below 1550 this is just a normal correction. We are watching for a sign to enter back into the Major US markets.

n sp feb 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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