Exactly my thought, unless the world can create a new market to push up demand there is no way a quick recovery will occur given the excess in production capacity at the moment. I for one do not think that China can be the new market that we hope for, not in the short term at least.
I see current persistence in comodity price and it's rallies are nothing more that the work of speculators trying to make quick money out of the liquidity that's been pumped into the system by the governments. There is also the factor of governments trying to spruce up sluggish economy but how far can they go? We've heard of factories being closed down by companies all around the world - the latest victim was Toyota's LA manufacturing facility. It all boils down to one simple question "why would the price of monkey goes up when there is a stagnant demand and an excess production capacity for it". I think this recovery will be a slow and long (sidewayish - L shaped or rather I_________I) recovery. On Wed, Sep 9, 2009 at 10:13 AM, Bagus Putra Perdana < disclosure....@gmail.com> wrote: > > > Yes It Is, as shown in ur kindly attached Doc., US Export Hadnt Improved > much in H1. Should Commodity Price Rise Higher and Faster than the actual > economic recovery (we can use US's Export as an Indicator) than i guess the > Gank should exit and bundled the profit at the level where the commodity > price would disrupt the economic recovery.. > > but its much too early to say economic recovery is not running as well as > we think they were. atleast low interest and money stimulus should start > showing its effect in H2 data. problem is some guys already went ahead of > the curve and discounting the recovery. so any downside surprises on the > recovery might prove catastrophic to the equity market. > > it might be simple but i think we shouldnt underestimate the effect of low > interest-rate environment. remember the old formula back in the beginner > economy class that the forecasted 1-2 year economic growth sets by the > Monetary Regime is a function of ten-year note yield minus three-month bill > yield), it is sitting at about 3% Spread now and the monetary regime is > throwing all tools available to pump the gear back. so H2 09 Figure is the > ringing bell i guess. all the folks here might go a bit ahead of the > curve,but i guess its okay for Indonesian to be so. we're cool aint we? > double economic engine growth. domestic dependent-play and rising > commodity-play is okay for us. > > the million dollar question el, is who will be the "World Consumer" now?, > Who will be purchasing all those goods and supplies and exports? Emerging > Nations?, Wealthy Middle East? where will the fund flow go? > > > > >
