From whom would you rather take investment advice: one of the thousands of bankers or wealth managers who did not see the financial crisis coming or one of the few economists who predicted it?
They keep telling us that the recession is over so maybe now’s the time to start worrying about inflation. That’s the view many wealthy investors are already taking, reasoning that a little bit of the yellow shiny stuff will provide some comfort as we start piling our cash into wheelbarrows to do the weekly groceries shop.
Five things to think about this week:
- The MSCI world stocks index has rebounded 37 percent since March, the VIX fear gauge has hit its lowest level since September 2008, and positive earnings surprises in Europe are marginally outstripping negative ones. But there are serious questions over the equity market’s ability to sustain its rise.
Marilyn Monroe, who sang “Diamonds are a girl’s best friend” in the 50s, might be shocked to find out that the value of dimonds has fallen rapidly in the past six months.
The price of oil was falling sharply on Tuesday after traders stopped worrying about former Hurricane Gustav’s winds, but by at least one calculation it remains very pricey – that is, its link to the price of gold.Some market watchers argue that there is a long-term relationship between the prices of the two commodities. Roughly speaking, this theory would have 10 barrels of crude oil costing the same as one ounce of gold. Back in March, for example, gold hit a record of $1,030 an ounce and a barrel of oil brought around $105.