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:

  1. Japan has twin engines of fiscal and monetary policy.
  2. 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
  3. US stagnation results from highly expansionary monetary policy and contractionary fiscal policy plus rebirth of middle America
  4. 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
  5. EU has contraction and the ECB is inactive 

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