Summary
-Markets will be rocky for the next few months.
-Emerging Economies are slowing, fighting inflation.
-Euro looking dangerous
-The PIGS are heading for a recession.
-China is tightening, to force a slowdown in construction and force inflation rates down due to social issues.
-We are seeing a global economic slowdown that is changing global fundamentals
If scenario is correct, best positions would be in a risk off trade:
- Long US Dollar
- Short copper and other base metals
- Short commodities
- Short commodity currencies (CAD, AUD, NZD)
- Defensive stock sectors (if you have to be in stocks)
- Long term US Bonds are awful
- Short term will be a ride to safety
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