What Globalization is All about:


It is all about the capurting of new, emerging markets and also the country with the cheapest currency (i.e. highest degree of exports) has the obvious benefit.

Right now there is economic warfare being fought between the US/EZ (Euro Zone) and it's Asian trading partners China/Japan. The battle of this week is at the G-20 meetings. It is about getting the currencies more.

China is quite unlikely to float it's currency any time soon for any number of reasons, the main being that they view the Japanese collapse of their 80's and mid 90's as being because of the U.S. causing the Yen to appreciate. You know what? They are absolutely right about that. In addition to their exports may get hurt, their banking system is in a really vunerable position. If their exports fall and company drys up a little, there is gonna be a lot of loans. The banking system is not set up to correctly offset the losses which would accrue if their currency rapidly appreciates. That is one reason why ur gonna see financial expertise and investment and more.

On the flip side, it's vital that the Chinese market (and all emerging markets) for American products keeps growing. The consumption part of our market is gonna plogist as a result of aging of the baby boomers-there's just less individuals from the 18-45 market and that means less demand for everything from cars, homes etc..

How does trading currency look? The USD, EURO and GBP confront similar economic situations. There is less of a demand for interest rate climbs in the moment for the US and Eurozone (although Trichet is doing his customary jumping up and down and barking suggestion ) and more demand for the currencies to devalue relative to the Asian currencies. Of the 3, the GBP is the one which really needs a rate rise. The GBP/JPY and EUR/JPY pairs are trading at the highest levels seen since approximately March of 1998. They definately want to see their currencies come off those levels, but the GBP figures to be strong so that will not occur there yet. EUR/JPY is most likely topping out, or is near it. This is suggested by futures. The USD/JPY is at the same level as it had been since October of 1998. Something to check at there.

Http://bloomberg.com/apps/news?pid=2...grefer=economy

http://bloomberg.com/apps/news?pid=2...Yrefer=economy

With the brief US week, there is a lack of news reports, however Monday's Leading Indior could be good. BB is calling a rise so we'll see what happens.