03 July 2008

When BRICS Crumble

Brazil, Russia, India, and China constitute the BRIC group of emerging nations. The BRIC nations have been seen by international investors as a safe investment haven during a time of economic downturn in most of the developed world. Unfortunately, high oil costs are beginning to take a toll in some BRIC countries.
...the BRIC economies are under stress of seeing their economies crumble under the threat of runaway inflation. India's troubles are perhaps just an early-warning sign. Inflation in China is running close to 8% in spite of higher interest rate.

Inflation in Russia just topped 15%. Brazil, which suffered a painful hyper-inflationary past, recently raised interest rates after inflation crept up to 5.4%.

Stock investors, seeing this threat on the horizon, are now pulling money out of the BRIC markets. As an Indian government official said recently, "Until inflation slows, this crisis is only going to widen." __SeekingAlpha
The international investment scene is a showcase for human hysterical tendencies, and the mass psychoses of groupthink. The current speculative circus revolving around commodities prices should suggest several ways that a more level-headed investor could take advantage of the dominant market hysteria--a hysteria that is further inflamed by mass media, and propped up by anti-energy policies within the US government.

These are merely opportunities disguised as problems. When skiing down a wooded hillside at high speeds, look at the spaces between the trees, not at the trees themselves.

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“During times of universal deceit, telling the truth becomes a revolutionary act” _George Orwell

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