Keep INVESTING Simple and Safe (KISS)
****Investment Philosophy, Strategy and various Valuation Methods****
The same forces that bring risk into investing in the stock market also make possible the large gains many investors enjoy. It’s true that the fluctuations in the market make for losses as well as gains but if you have a proven strategy and stick with it over the long term you will be a winner!****Warren Buffett: Rule No. 1 - Never lose money. Rule No. 2 - Never forget Rule No. 1.
QE2 may have 'catastrophic consequences' for global economy
By Ren Jie (chinadaily.com.cn)
Updated: 2010-11-12 10:54
The US Federal Reserve's recent move to issue $600 billion for restoring a foundering US economy may have catastrophic consequences for the global economy, according to Cheng Siwei, economist and former vice-chairman of the Standing Committee of the National People's Congress.
Cheng made the remarks at "A World Summit: The Ascent of China's Capital Markets" in Beijing on Wednesday.
Emerging-market stocks rose and prices of bulk commodities surged significantly last week following the US Fed's announcement on Nov 3 that it will buy $600 billion in Treasury bonds to boost the US economy, in a move known as "quantitative easing" (QE2), which triggered global debate. Many economists say they believe that the policy's effectiveness is uncertain.
Cheng said the US QE2 may trigger inflation in global markets, adding that the move will lead to an inflow of hot money to some countries and put appreciation pressure on the currencies of those countries.
Cheng also said there are many ways for hot money to enter in China, especially since the country's central bank is raising interest rates. He said busting underground banking rings will help the country curb hot money inflows.
Cheng also said he is a "prudential optimist" and is confident in the performance of Chinese stocks in 2011. He admitted that the A-shares are still in a bear market, but said the worst part of it is over. Chinese capital markets will gradually enter in a bull market next year as the nation's economy growth remains stable.