Bush’s budget plan bearish for gold bullish for dollar and bond markets
Karen Zuba
Feb. 5, 2007

The Gold market will have trouble living with reducing budget deficit. The Democrats will confront the Bush budget plan, as they will call it out of touch with the main street. But one thing Bush has done and he deserves a lot of credit for that. He has set the tone for the next several years for reducing budget deficit and trade deficit.

It is bullish for dollar and the bond market. It is equally bearish for the gold market. As the emerging economies are required to remove the artificial devaluation in their currencies, dollar will strengthen against currencies of major industrialized nations in the Euro Zone.

The emerging economies had their best days in 2005-2006. The decline in their economies is evident. The people in China and India are in credit car, car loan, home mortgage and other debts like never before. People in those countries do not understand that they just mortgaged their future. The financial institutions do not have appropriate legal systems to recover the loan in India and China. They use thugs to go after the debtors. The effect on these emerging economies when these people are forced to pay debt and not spend on essential goods and services will be catastrophic. The depressed economies in India and China will be extremely bearish for Gold market.

Bush’s budget plan bearish for gold bullish for dollar and bond markets
Karen Zuba
But one thing Bush has done and he deserves a lot of credit for that. He has set the tone for the next several years for reducing budget deficit and trade deficit.
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Another good investment now is basic raw materials for food processing industry – look at the commodities and stay away from the stocks
Fred Day
The prices for raw ingredients for food will rise sharply. The chart patterns are clear. The prices of grains, the meats, milk, eggs, sugar, cocoa and other raw materials for the food processing industry are on the rise.
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ISM Non-Manufacturing data will show the service side of the economy is steadily growing but small business are slowly contracting
Peter Oberois
The increased ISM Non-Manufacturing data will a reason for joy in the stock market. But something very interesting is happening behind the scene. The small businesses are losing hope. They have started contracting their future expansion plans.
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Falling wages, sub par employment, productivity rise and disinflation are signs of deflation – stocks and gold have trouble ahead
Sam Adelton
The heavy public and private debt burden will make deflation ugly like never before. The Federal Reserve loses control over the monetary policy once deflation starts.
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Best investments for the next ten years – Domain Names, Farm Land and Cash in the Bank
Special correspondent
If one does not want to get involved in Domain names or Farmland, the other choice is keeping cash in the bank. Smart people will try their best to get debt free and then keep their cash in the bank in CDs.
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If you believe oil will go up or stay up, you should buy sugar 11 futures contracts
Peter oberois
The sugar (11- international) is trading like the crude oil. Since Brazil has converted most of its sugar infrastructure to ethanol and the same trend has started in India and elsewhere, sugar is in shortage worldwide.
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