It’s Japan and Not the USA

It’s Japan and Not the USA…!!!

According to Moneylife,

One of the key factors for the global rally in equities, real estate, gold and commodities is the low US interest rates and the surge of global liquidity. At least that was the assumption among many smart Indian and foreign market players. So, with the rising US interest rates, there was a strong possibility that this global liquidity driven rally would come to a crashing end. This has not happened. Indeed, global markets have risen even more sharply with the rise in US interest rates. How did this happen? GaveKal, an independent economics research company based in New York and Hong Kong thinks it has the answer. According to its gripping new theory, the smart guys in the world have been monitoring the wrong source for global liquidity. Money to keep the asset prices going to newer heights is coming not from the US but Japan…..

Well, Yes. This is true. Actually Japan is printing billions and trillions of Yen out of thin air with almost NIL interest rates and the Japanese investors borrow this money from Japan government at lowest interest rates to buy the US Dollars at little bit higher interest rates and play in the emerging economies like India.

And this is the reason why stocks, gold, silver and real estate markets are rising like hell.

So What all these means to Average Investor?

You may ask me that, what’s all these have to do with me? I am the average investor who invests in safe instruments like FDs, Post-office savings schemes and PPF. Why Should I worry about equities, gold and real estate prices?

Well, the meaning of above news is that, wealth in your fixed income instruments is shrinking day by day because of the money printing activity of Japan and USA. Very soon, you won’t be able to retire on your fixed income instruments.

So start learning equity investing now and start investing in the equity for the long term if you really want to live peacefully after your retirement.

All of such kind of news shows that, the rules of money have been changed now. You can not be financially free with the old rules of money means save money, put it into the PPF/Bank FDs/Post-office savings schemes and retire peacefully.

Everythime, the new money is being printed in the world economy, it dilutes the purchasing power of your money parked in the Fixed income instruments.

So It’s time to increase your financial IQ.