Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
UK Population Growth - Latest ONS Immigration Statistics and Consequences - 24th Mar 19
The Fed Follows Trump's Tweets, And Does The Right Thing - 24th Mar 19
Yield Curves, 2yr Yield, SPX Stocks and a Crack Up Boom? - 24th Mar 19
Risk/Reward in Silver Favors Buying Now, Not Waiting for Big Moves - 23rd Mar 19
Similarities Between Stock Market Today and Previous Bull Market Tops - 23rd Mar 19
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

Brazil, Commodities Bull Market, Are You Missing The Boat?

Stock-Markets / Investing 2010 Sep 27, 2010 - 08:04 AM GMT

By: Larry_Edelson

Stock-Markets

Best Financial Markets Analysis ArticleIf you haven’t been investing in the gold market, like I’ve been telling you to do, then not only are you missing the boat …

… but the boat you are in, whatever it may be, is most likely sinking — weighed down by the effects of all the Fed’s money printing, which will continue as far as the eye can see.


Just last week for instance …

arrow black Are You Missing The Boat?  The Federal Reserve bought a record $5.19 BILLION in U.S. Treasury bonds and Federal Agency mortgages, effectively printing more money than it did in any other week this year.

Equally important …

arrow black Are You Missing The Boat?  The Fed also announced that it will essentially stop at nothing to turn the economy around … that it stands ready to print money whenever it feels it needs to … and that it wants to spark inflation.

Haven’t I been telling you all along that this was going to happen?

That the Fed would stop at nothing to ignite inflation … print money like crazy — and that deflation had little chance of taking root in anything other than real estate or perhaps the latest tech product to come to market?

Meanwhile, GOLD is now hitting one record high after another, soaring to $1,301.60 an ounce as I pen this issue … and firmly on its way to its next pit stop at the $1,375 level!

Your average gold share is also soaring, up more than 6% since the first of this month … and more than 18% since the end of July.

And it’s not just gold that’s flying …

The price of almost every commodity on the planet is skyrocketing!

Sugar, up more than 50% in only three months. Cotton, up more than 40% since July 20.

Soybeans, up more than 20% since the beginning of June. Oats, up more than 60%. Corn, jumping more than 48% just since the beginning of July!

Palladium up 20% since early June. Copper up 26%.

The Fed’s money-printing and dollar devaluation is the chief reason we’re seeing these massive price gains in natural resources, tangible assets.

Fed money-printing and dollar devaluation have lit a fire under commodity prices.
Fed money-printing and dollar devaluation have lit a fire under commodity prices.

But it’s not the only reason. There’s also huge, non-investment related, consumer and industrial demand for natural resources — emanating primarily from Asia’s still hotly growing economies, especially China.

So where are all the supplies for these commodities coming from? I’ll tell you more about that in a minute.

First, let’s look at some facts on how rapidly China is growing, even while the U.S. and European economies remain stuck in the mud …

arrow black Are You Missing The Boat?  China’s factory output soared nearly 14% in August, year-over-year.

arrow black Are You Missing The Boat?  China’s retail sales surged almost 19% in August.

arrow black Are You Missing The Boat?  Through August, China’s capital spending soared 24.8%.

arrow black Are You Missing The Boat?  Last month, China sold 1.322 million autos, fully 32% more autos than were sold in the U.S.

As China goes, so goes pretty much the rest of Asia!

So what countries will benefit most from the Fed’s weak dollar policy … soaring commodity prices … and by meeting Asia’s burgeoning appetite for natural resources?

Well, of course, there are Australia and Canada. But lest you think those are the only two major country plays in natural resources, think again!

There’s another corner of the globe that is rocking now — Latin America!

My colleague, Rudy Martin, is a leading Latin American expert. He’s got some great insights to what’s happening in this often overlooked, but rapidly growing part of the world.

You won’t want to miss the boat on this market. So I’ve invited Rudy to give occasional comments on Latin America and its emerging economies.

This week, Rudy focuses on Brazil. Check out his comments below.

Best, Larry


Thanks Larry!

Latin America is certainly benefiting from China’s growing need to import food and natural resources, especially Brazil, whose main index, the Bovespa, has nearly doubled since its March 2009 low.

Nonetheless, I’m still finding undervalued situations in Brazil, for five major reasons, in addition to its abundant natural resources

1. Underpriced stocks: A composite of 164 Brazilian stocks I track sells at just 11.2 times next year’s earnings, or 12% less than U.S. stocks.

Meanwhile, Brazilian companies’ earnings are growing at annual rates of 28%-30% — almost double the earnings growth of Dow Industrials stocks.

2. The solid Brazilian real: The Brazilian real currency rallied by 32% in 2009, the biggest advance among the world’s 16 major currencies.

And while Brazil’s government is getting a bit concerned the real is appreciating too rapidly, with the U.S. dollar so weak, I have no doubts the real will continue to remain a strong currency with upside potential.

3. Interest rates and inflation: Brazil’s central bank benchmark interest rate is 10.75%, while inflation is running at 5%. That gives Brazil’s rates a net real interest rate of 5%, after inflation.

4. A massive emerging consumer market: The average Brazilian earns $10,500 of income annually, versus $14,000 for Argentines and Chileans.

And yet, in many ways, the Brazilian economy is much more developed and less regulated than both.

Moreover, Brazil is a young economy: 70% of its population is between the ages of 14 and 65 — meaning there’s a huge emerging consumer market there, and less of the population dependent upon either their family or the government.

Bottom line: If you’re serious about geographically diversifying your portfolio, consider, at least for starters, a nice position in Brazil. You don’t even have to leave home to do so, or open a brokerage account there.

I believe the best all-around way is to stake out a position in the iShares MSCI Brazil Index Fund (EWZ). — Rudy

This investment news is brought to you by Uncommon Wisdom. Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. From time to time, the authors of Uncommon Wisdom also cover other topics they feel can contribute to making you healthy, wealthy and wise. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules