It's the economy, stupid... And Socialism is never good for the economy...

More redistribution, less new production - this the meaning of the Obama's speech on economy, during State of the Union address. More taxes, more spending on government programs and an increase in the minimum salary - it is just like we were hearing a trade union leader from Europe.

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No currency war... granted by politics

When all politicians are talking against "currency wars" you must be very careful and look at what exactly they are doing. Today the G-7 group declared that no currency war is going, but at the same time it is clear that Japan is printing Yens in accelerated manner. Also today it became clear that ECB is ready to compensate the decrease in money supply that is coming from preliminary returning of some of LTRO loans given during the peak of the financial crisis. I.e. the printing machine is ready. Formally the reason of eventual flooding the markets with new money is the risk of increase of interest rates on some government bonds (including German ones). But in fact such an intervention will devalue the Euro.

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Gold has fallen below $1650, while Putin is buying

I don't know what is the exact reason for gold plunging $20 down today, by my advice is the same as in similar situations - buy. Use the cheap moment and buy. Till the end of the week I expect you will make at least $20-30 profit, and in mid and long term - $50-100. Gold is deeply devalued at the moment. Read more...

Egypt obviously needs a new Mubarak

An interesting development in Egypt is happening since the fall of the former dictator Hosni Mubarak. The country is de facto collapsing due to deepening economic crisis driven mostly by political instability and unrest. The last info of increasing inflation and devaluing currency is just another stroke on the picture of the constant economic crash that is making the country poorer and poorer, additionally destabilizing it.

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China has become the most trading nation in the world

China has become the most trading nation in the world, according to last statistics. It surpassed USA, just as it did this as the biggest exporter that happened in 2009 (surpassing Germany). But more interesting is something else. China's foreign trade is almost half of its GDP. While US foreign trade is about 25% of its GDP. Obviously both economies are open ones, but it is also obvious that China is simply extracting businesses and income from USA (and from other nations too). Without this high trade, including the enormous trade surplus, China would not have such a good economic growth. I.e. China is not so much creating new economy and new markets, than is redistributing the old economy in its favor. And this process is deepening because more and more US businesses are going to China.

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