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Financial Markets Analysis: How to Survive Deflation

Stock-Markets / Financial Markets 2009 Feb 02, 2009 - 01:34 PM GMT

By: Nadeem_Walayat

Stock-Markets Best Financial Markets Analysis ArticleThe stocks bear market reasserted itself by the end of last week in response to across the board bad earnings reports and economic data accompanied by revised IMF forecasts of marked slow down in global economic growth. The stock market trends are in line with the forecast for 2009 that targets new stocks bear market lows for the Dow of 6,600 and FTSE 3,400 as per my earlier newsletter and associated syndicated article of 22nd January.


Other markets also continued to move inline with the forecast trends for 2009, with Gold breaking back above $900 to target $960, and the U.S. Treasury Bonds continuing to trend lower by targeting $120.

Financial Market Forecasts for 2009

The global economies continued to fall of the edge of a cliff in the face of real deflation that has made itself visible in CPI inflation data, as mainstream economic forecasters continued to play catchup and revise GDP forecasts lower for all major economies as witnessed by the IMF's latest revision for UK GDP for 2009 from -1.3% barely 2 months ago to now -2.8%, which is inline with my expectations for UK GDP contraction of 3% for 2009, but more on that in the UK Recession Watch to be published later this week.

The primary concern amongst investors is the implications of deflation on portfolio allocation for primary asset classes of cash, real estate, stocks, bonds and commodities during 2009 and beyond, with that in mind Robert Prechter has made available for free to our readership his in-depth 60 page Deflation Survival Guide e-book.

Your deflation investing analyst.

Nadeem Walayat

Editor, The Market Oracle
http://www.marketoracle.co.uk

Most Popular Financial Markets Analysis of the Week

1. Peter Schiff Was Wrong

By: Mike_Shedlock

There are numerous YouTube videos, articles, and references to Peter Schiff being "right" rapidly circulating the globe. While Schiff was indeed correct about the US imploding, most of the praise heaped on Schiff is simply unwarranted, and I can prove it.

Read Article

2. Crash 2009: Global Stock Markets on Edge of Cliff Facing DJIA 5,500

By: Eric_Chevrette

After it was definitely assumed on Jan 4 (see “Why 2009 deleveraging stock market and commodities crash is ripe”) that an 8 week liquidation leg was about to be ignited for commodities and global stocks by a renewed bull for the US $ and the YEN-Euro cross-rate, we can gather from the global market table below how accurate EWS methods can be when properly applied.

Read Article

3. U.S. Heading for Japan Style Two Decade Economic Depression

By: James_Quinn

Every day seems worse than the previous day. Five hundred thousand people are getting laid off every month. Our banking system is on life support. Retailers are going bankrupt in record numbers. The stock market keeps descending. Home prices continue to plummet. Home foreclosures keep mounting. Consumer confidence is at record lows. You would like to close your eyes and make it go away.

Read Article

Download your 60-page Deflation Survival Guide now

4. Peter Schiff Rebuttal- A Response to My Critics

By: Peter_Schiff

My popularity on television and the internet has led a very small money manager to use his popular financial blog to promote his fledgling business by attacking the recent poor performance of my long-term investment strategy. The post is causing quite a stir and compels me to provide some badly needed context.

Read Article

5. Gold Price Manipulation Further Forensic Examination

By: Rob_Kirby

Borrowing from the axiom that, “a picture is worth a thousand words,” today we are going to view the incredulity of recent macro-economic events with the aid of charts and graphs. First up is a chart of the price of gold [POG] over the past year with a few “milestones” pasted in for good measure:

Read Article

6. Warning: Mega-banks Could Fail Despite Federal Bailouts

By: Martin Weiss

The time has come to issue one of my sternest warnings to date: Bank of America and Citigroup could fail despite the most radical government rescues of all time.

Right now, after recent close calls with instant death, these two megabanks are on life support, receiving massive transfusions of government capital. But they're still hemorrhaging, and no one in Washington has found a cure.

Read Article

7. Reuters Gold Forecast Poll 2009: Gold Expected to Outperform Other Asset Classes

By: Mark_OByrne

Reuters Precious Metals Poll 2009
Reuters has released their Reuters Precious Metals Poll 2009 in which Gold and Silver Investments Limited has taken part. The survey of 56 precious metals analysts, traders and banks was carried out over the last three weeks.

Read Article

Download your 60-page Deflation Survival Guide now

8. Exploding Gold Demand as Governments Print Money

By: Larry Edelson

I haven't always been bullish on it. In fact, for about 20 years between 1980 and 2000, I was mostly bearish on this investment.

I believed the end of the Cold War had largely done it in from a geo-political perspective. I also believed that a new wave of technological innovation and stock market performance was going to give way to a slew of IPOs and a stock market boom in just about every asset but this one.

Read Article

9. Economic & Financial Markets Forecast 2009: Collapsing Global Financial System Ponzi Scheme

By: Ty_Andros

As economic activity and PONZI finance fall off the face of the earth, we enter the stretch run of the CON game known as the Bond and FIAT currency markets. Although both are headed for their ultimate demise, the path will be quite different. In 2009, these challenges will be headed your way. Prepare properly and thrive, or fail to do so and fall to your demise.

Read Article

10. U.S. Treasury Bond Bubble About to Pop

By: Shah Gilani

Frighteningly, like the rush into tech stocks, then the rush into real estate, and then the rush into commodities, the rush into U.S. government bonds has created a Treasury bubble. In a cruel twist of economic fate, passage of an aggressive Obama administration stimulus plan could further inflate that bubble - before popping it.

Read Article

By Nadeem Walayat
http://www.marketoracle.co.uk

Copyright © 2005-09 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 22 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 250 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Attention Editors and Publishers! - You have permission to republish THIS article. Republished articles must include attribution to the author and links back to the http://www.marketoracle.co.uk . Please send an email to republish@marketoracle.co.uk, to include a link to the published article.

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© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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