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International Market: Where World Economy Going On ?

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International Market: Where World Economy Going On ?

Last updated: May 23 2012
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  • #61

    #61

    Re : International Market: Where World Economy Going On ?

    parliament seems to be suspended for price rise issue !!

    why... dont they know (like digvijay and wiseman) that we are having deflation soon ?
    Last edited July 30 2010, 05:09 PM.

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    • #62

      #62

      Re : International Market: Where World Economy Going On ?

      Originally posted by sri_idea View Post
      parliament seems to be suspended for price rise issue !!

      why... dont they know (like digvijay and wiseman) that we are having deflation soon ?
      Food inflation has come down to single digits

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      • #63

        #63

        Re : International Market: Where World Economy Going On ?

        Originally posted by sridharchennai View Post
        Food inflation has come down to single digits
        you mean we should be happy for that ? or that it is the sign of things to come ie. expect it to go below zero in august...

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        • #64

          #64

          Re : International Market: Where World Economy Going On ?

          Originally posted by Digvijay View Post
          And I see nothing cheap right now.
          Real Estate is not cheap in Mumbai (Anderi etc).

          It is not cheap in Chennai (Boat club road, Chetput, RA puram, Anna Nagar, Besant nagar etc).

          It is not cheap in Bangalore.

          It is not cheap in Hyderabad.

          But what the people are suggesting is Buy a piece of land in the upcoming area and keep it for 5 - 10 years... you will get good returns. You should have relatives or friends in the Tier II cities then you can buy there.

          You can buy near Salem, Trichy, Madurai, Kovai.

          Tirunelveli to Kovilpatti road - Gangaikondan, Kovilpatti are seen good number of land transactions.

          I bought few cents of land near Madurai.(RS 20K per cent in the year 2005). Now it is Rs 60K.

          Can you buy in Chennai for the above price ?

          It is better in Porur to Sriperumbuthur road.
          It is better in Tiruvallur to Sriperumbuthur road. Lots of houses built there..

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          • #65

            #65

            Re : International Market: Where World Economy Going On ?

            Originally posted by sri_idea View Post
            you mean we should be happy for that ? or that it is the sign of things to come ie. expect it to go below zero in august...
            sri_idea,

            Ours is a fiat currency based economy.Which means the value of our rupee is directly impacted by the deficit and debt of our government.

            In such a debt based economy, reduction and unavailability of credit is interpreted as deflationary.The reason why RBI is taking cautious baby steps in increasing interest rates is because they have to balance the inflation caused by the stimulus they announced and also ensure the growth is not impacted adversely when its withdrawn.

            Deficit pressure will ensure that stimulus will be withdrawn sooner or later.When supply of money goes down deflation is caused.

            Deflation doesnt mean reduction in prices always.It first results in reduction of production.If supply is less automatically price will go up.The price rise and inflation you are seeing now is primarily because of low supply, not excessive demand.

            Also, This week the food inflation has come down to single digits.That doesnt mean price is reducing.It only means it has risen by the single digit percentage.

            Hope this clarifies some of your doubts.

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            • #66

              #66

              Re : International Market: Where World Economy Going On ?

              Originally posted by nabishek View Post
              sri_idea,

              Ours is a fiat currency based economy.Which means the value of our rupee is directly impacted by the deficit and debt of our government.

              In such a debt based economy, reduction and unavailability of credit is interpreted as deflationary.The reason why RBI is taking cautious baby steps in increasing interest rates is because they have to balance the inflation caused by the stimulus they announced and also ensure the growth is not impacted adversely when its withdrawn.

              Deficit pressure will ensure that stimulus will be withdrawn sooner or later.When supply of money goes down deflation is caused.

              Deflation doesnt mean reduction in prices always.It first results in reduction of production.If supply is less automatically price will go up.The price rise and inflation you are seeing now is primarily because of low supply, not excessive demand.

              Also, This week the food inflation has come down to single digits.That doesnt mean price is reducing.It only means it has risen by the single digit percentage.

              Hope this clarifies some of your doubts.
              As long as one has Job.. no problem.. whether Rice costs RS 40 / kg or Tomoto costs RS 50 per kg or any other vegetable costs Rs 50 per KG.

              Food Inflation.

              Steel, cement and other metals inflation.

              Wage - inflation.

              If the US goes to double dip recession ... then we will know the impact.
              How many jobs will be saved (

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              • #67

                #67

                Re : International Market: Where World Economy Going On ?

                nabishek

                thanks for some detailed explanation.

                i knew just about enough to figure out that 9% inflation means price rise. it was a poor attempt at being sarcastic...

                Comment

                • #68

                  #68

                  Re : International Market: Where World Economy Going On ?

                  I don't own these predictions!

                  Friends,

                  Let me clarify a lot of things in a few words!

                  Digvijay was talking about Bob Prechter (www.elliottwave.com) a longtime practitioner of his version of RN Elliott's wave theory. Besides Elliott, there are many wave theories like the Kondratieff's theory and so on. Basically, its human quest to finding out if there is a predictable pattern in the past which can be extrapolated into the future so that we can be better prepared. Nothing wrong in that since I also see the same kind of behavior when companies forecast their 2011 performance, which, investors don't have any problem believing (we believe what will support our pre-conceived notions).

                  In short, many of the wave theories see their cyclic low-periods (or Winters) coinciding around the period post 2008 and all the way upto 2022. Prechter believes that we are seeing the end of a Grand Super Cycle that started around the time America was born. So, we will probably see a large reversal which (typically) reverses the entire rise of the previous cycle.

                  According to Prechter (and most Wave theory proponents), we saw A wave from 14200 to 6400, B wave from 6400 to around 11200. We may have seen the top of B wave (Bear Market Rally) around 10 April and may have started the C wave. This is normally the most feared wave which is sharp, steep and longest, expected to break below 6400 and go down to between 3000 and 5500. The beauty of the EWT is that it not only forecasts price but also time so you know around when you can expect a reversal (critical for contrarians who do not want to get caught going contra too early!). His worst case target is 600 on the DOW sometime around June 2016!


                  To cut this short, there are all kinds of opinions by some very savvy people on the Net. I read everything I can lay my hands on and over the last few years have come to some ranking of who to read regularly and who to read once-in-a-while.

                  Most people do not like to see below when climbing because of fear. I prefer to figure out the worst case scenario and work myself into a position to avoid getting killed just in case it happens. Then I go about my life as usual. Please note that I'm able to accept the most fearful scenarios into my calculations and even make plans to use it as well as possible when it happens. At the same time I continue to go about my other money-making efforts without getting frozen.

                  I request all you people who get fearful at the mention of the word recession/depression to face your fears, get over it (even plan on how to have plenty of cash when it happens) and not get frozen with indecision or fear.

                  To sum up, Bob has the following predictions to his credit ...

                  After the 1980 bear market, Bob predicted a multi-decade bull market. He has called the 2000 peak as the real peak for the Grand Super Cycle that started in the 1770s. Back in mid-2007 he called for a peak and asked people to go short ar S&P 1550 levels. Then in mid-Feb 2009 he called for the nd of the A leg and the start of an extraordinary bear market rally (mainly due to the stimulus) that could go as far as 11000 and asked people to cover their short positions around 700 and go long. Since Oct 2009 he has been on caution mode and in Feb 2010 he called for a top. This seems to have happened around 10 Apr 2010. As the stimulus is winding down, GDP growth is starting to vanish, the millions of jobs promised by Obama have never appeared and the US seems to be slipping back into the Great Recession which is likely to become a Depression and then a Great Depression.

                  I think a guy (and his system) who has come up with so many important turning points should be given some respect, huh?

                  In our markets, I keenly follow Vivek Patil who I consider the best EWT person (he follows another variant called the Neo Wave Theory). Have saved every one of his weekly posts since 2002 and he is now available to people who can login to ICICI Direct. There are other longtimers like Deepak Mohoni, but Vivek is the sharpest and clearest (even he gets fuzzy some times). If anyone knows others who are good or better, please let me know!

                  As always, many times predictions go wrong because factors were not considered, or they changed or analysts simply did the wrong thing. But because some predictions are wrong, you don't throw the baby out with the bathwater!!!

                  Thats all I had to say. I only read, digest, evaluate and, after seeing if predictions are starting to move correctly, put it into my posts. I don't exactly own them!!!

                  And, yes. ALL went from 14 to 75 because of a sudden jump in quarterly profits. I didn't buy ALL at 14 because they are not a consistent performer (that way I'd have to buy every low stock in town hoping they will shoot up one day), and now that its gone to 76, I'll do an analysis of their performance to see if it is not just due to a one-time windfall and in case it really shows long-term promise, will wait for it to come down to really attractive levels to pick it up.

                  Such stock movements have nothing to do with the longer term issues I'm discussing. And in fact, if we do see a global depression going forward, not only will this sudden jump in ALL profits vanish as quickly as it came, the stock too will reverse all of its gains. My analysis prevents me from jumping headlong into ALL at 76 and hold it all the way down to 15 again!!! Worth the while, I think.

                  cheers
                  Last edited July 31 2010, 06:53 PM.

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                  • #69

                    #69

                    Re : International Market: Where World Economy Going On ?

                    To be honest, Nobody knows !

                    Everyone is hoping for the best !!

                    It is like siting on top of a Volcano, wishing it does not blow up, till I'm seated!!!

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                    • #70

                      #70

                      Re : International Market: Where World Economy Going On ?

                      Is the hike in visa fees going to affect the number people that Indian IT companies will be sending to USA?

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