People,
mainly buyers and sellers, seem to think that today or at the moment
the situation of the economy is doing well, perhaps there's no
direction!
Some
people think the economy is doing well, mainly those people who think
it goes up. A few days ago there was a news about Chinese exports and
normally when you hear this type of news and when you get people analyse
it you will find that the export were something like not proper goods
but something else. Such as electronics stuff or components.
So far, what people are watching when comparing the 'book' is either the Chinese economy will go down or up.
A
lot of people cannot see how the Chinese economy will continue growing
if everyone itself is no longer buying like America, Europe, United
Kingdom or the biggest market. Most of their sales are sold to those
countries that reached up to 75% or 80%.
Today,
all those countries are in absolute distress, so, how can their market
continue growing? There are two ways they can adapt either to export
more goods to the far east in which the far east has no big middle class
consumers' society or its own people could be buying more goods.
The
only way its own people could buy more goods would be if the Chinese
government is prepared to give their people more money which would mean
increasing the value of their currency. If they increase the value of
their currency the prices of their goods will go up, thus, people will
buy less offers so they are in catch 22; the buying dilemma!
So,
on one hand a lot of people especially fund managers want to put their
money into shares, earn dividend and see growth. But the more realist
people are, they can see that most growth so far comes from government
spending. Those from China, Europe and America, their government just
about spend much they can afford to and if they keep printing money, the
bond market will stop lending them money. That was happened in Greece as I said before!
So,
at the moment the stock market has come to a shaky balance between
buyers and sellers because there is no direction. This is because of the
export growth in China that people will think and see as a sign that
the world economy is picking up. Probably, this is a growth from the
very lower, much lower!
The
beginning of this year there was growth after a huge down-turn and most
of that growth are people, factories, countries etc. that were so
frightened in that banking crisis last 2008 and 2009.
A
lot of 'people' recommended replenishing inventory, which is
re-stopping. It is interpreted as an up-turn in the world economy but it
is not really an up-turn but a job less recovery. This is nearly when
people adding put-off through fear that is why the government had the
cash for clankers which brings purchasing forward and gives the illusion
of growth.
