Last year, I predicted short term tactics and maneuvers would be the main stream of the tiger year and the precarious stock market is not for the timid. Looking back, isn’t it all the same for every year? Market is as unpredictable as always.
In last year, we saw the thorny question posed to China and US over currency exchange, which is still unresolved after President Hu’s state visit to the US. The Wall street gurus and wizards appear to be back on their feet and making rains again despite all the ongoing law suites and scandals. People are forgetful and making money is loved by all people. Even though we saw another suicide jump from Foxconn, there is no big fuss around it this time. The labor market of China is rapidly transforming in the wake of last year’s events and there is no turning back.
Around the world, governments are still borrowing money and printing money to save their economies. How come borrowing and printing can drive economic growth? As a matter of fact, they drive up economic growth in numbers at the expenses of poorer countries and poorer people of their individual countries. The voices of those countries and people are less heard. So the economy appears to be looking up. And as such the inflation is definitely coming. The world observes the price hikes in food and minerals again toward the end of last year. Even though we are seeing wage increases recently, it only means a proportion of people can make ends meet and maintain their current living standards with more falling below the poverty line and left unheard and on their own.
Is the economy coming around in substance or just in numbers? I would say more in numbers than in substance. And the world will jump up and down like rabbits this year because of the widened inequity caused by inflation not because of vibrating economy if governments around the world stick to the old ways. What can an average citizen do in times of inflation? Not much other than do not trust your monetary notes printed by the banks.