Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
How to Capitalise on the Robots - 20th June 24
Bitcoin, Gold, and Copper Paint a Coherent Picture - 20th June 24
Why a Dow Stock Market Peak Will Boost Silver - 20th June 24
QI Group: Leading With Integrity and Impactful Initiatives - 20th June 24
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24
Bitcoin Trend Forecast, Crypto's Exit Strategy - 31st May 24
Zimbabwe Officials Already Looking to Inflate New Gold-Backed Currency - 31st May 24
India Silver Imports Have Already Topped 2023 Total - 31st May 24
Gold Has Done Its Job – Isn’t That Enough? - 31st May 24
Gold Stocks Catching Up - 31st May 24
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

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.


© 2005-2022 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