Salient to Investors:
Jay Pelosky at 2Z Advisory says investors should focus first on where there is flexibility by policy makers, and the best places to invest in order are:
- Japan has twin engines of fiscal and monetary policy.
- UK government has made it clear they will not move off austerity but will tolerate inflation. Buy inflation-linked bonds or stocks as the pound weakens over the next 12 months
- US stagnation results from highly expansionary monetary policy and contractionary fiscal policy plus rebirth of middle America
- Emerging markets have stagflation from low growth and high inflation, and are switching from export driven to domestic driven economies giving opportunities in currencies and local currency debt
- EU has contraction and the ECB is inactive
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