by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
Expat Investor : January February 2008
The inside track on where Four experts predict where your investment capital could be profitably place over the coming year. Online Brokerage for Offshore Investors • Trade Forex, Futures, CFD's and Shares offshore • European, North American & Asian Stock Exchanges • Backed by TD Waterhouse and Fortis www.internaxx.lu Tel: (+352) 2603 2003 Your International Online Broker in Luxembourg Internaxx Bank S.A., 46a avenue J.-F. Kennedy, L-2958 Luxembourg, R.C. B 78729. Not so many months ago it was very easy and cheap to borrow huge sums of money. Now, with nobody quite sure who's holding all the bad debt, liquidity has disappeared from the cash and credit markets. The banks are either unwilling or unable to lend to each other and the cost of money has risen as a result. And this is not just a US problem, as the spectacular demise of Northern Rock attests. Whilst interest rates are falling in America, they are either rising or stable in the broader 'dollar area', that is, those countries that still maintain fixed or crawling currency pegs versus the US dollar. These divergent interest rate trends threaten to upset these currency arrangements given the way in INVESTMENTS expatinvestor.com 6 EXPAT INVESTOR January/February 2008 Fast Facts 22003 policy could be at hand. If Asian currencies appreciate substantially it would be good news for Western companies competing with the East; however it would be bad news for Western bond markets due to smaller savings flows and higher inflation. In short, although it would likely cement another up-leg in Western stock-markets, it may well prove to be the last for a while. For Asia it would be positive news all round. First, it would be an important stepping stone in their development -- it would make the Asian consumer wealthier and reduce the region's dependence on exports for growth. Second, it would help to keep inflation low and stable. Furthermore, any loss of export ASIA KEEPS ON GROWING NICK LEE, INVESTMENT DIRECTOR, ASHBURTON Earlier this year it became increasingly apparent that Asia had had its fill of US treasuries and wanted to take a few more risks. China bought a stake in Blackstone, the private equity company, possibly as a backdoor route into American assets. Bond yields started to rise quite sharply. This worsened the plight of the US property market, which was already well past its best. More recently rising bad debts, particularly in the sub-prime section of the mortgage market, have escalated into a nasty global 'credit crunch'. which they encourage hot money flows. In the first instance, China will surely attempt to maintain the status quo through currency intervention, but this will serve to stoke money supply growth and asset price inflation at a time when the stock-market is already going through the roof. It is, therefore, likely that these attempts to slow the pace of Renminbi appreciation will come to nothing and a meaningful shift in "In the first instance, China will surely attempt to maintain the status quo through currency intervention, but this will serve to stoke money supply growth and asset price inflation at a time when the stock-market is already going through the roof. "