**Some have been talking about the Euro becoming the next benchmark currency. Not soon– would be my take.
“The Dubai shock may be receding, but have the lessons been absorbed? The world is still awash with debt assumed to carry a guarantee from a rich neighbour. Take the euro zone: like the United Arab Emirates, it is a loose federation with a single central bank but only limited central political power to enforce fiscal discipline on profligate members. Excessive euro-zone deficits now present one of the biggest risks to the global recovery.
Several European countries – Greece, Italy and Belgium – already have debts of more than 100% of gross domestic product. Others will join them in 2010. Across the euro zone, the deficit in 2010 is likely to be more than 7% of GDP. The European Commission is demanding member states bring deficits back below the European Union's limit of 3% by 2013.”
See WSJ: Europe's Threat to Global Recovery.
**Thanks to government stimulus funnelling into mass production, China has too much of most things these days; even wind power:
“Beijing has big plans for wind power as a renewable energy of the future, but China may already have too much of a good thing.
At home, China's power-transmission infrastructure can't handle the intermittent electricity supply already being generated from wind. It is estimated that 30% of last year's wind-power supply went unused.
Despite that bottleneck, Beijing wants more. The government hopes to see 100 gigawatts of wind-power capacity installed in China by 2020, a more-than-eightfold increase from 2008, making wind the third most important source of power in China behind coal and hydroelectric. Even by next year, the amount of wind-power equipment being made will be twice what the nation can install, according to the central government.”
See: Wind Power Winds up China's Competitors
The task is to figure out how to capture and ship China's excess wind power to the rest of the world. The future is coming, we had better get ready for it.
**Despite the incredible price rally over the past 9 months, most investors are still down heavily since the equity peak in 2007 and this is on top of losses in their real estate portfolio. In addition, the bear market of 2007-2009 has been the second vicious bear to ravage the net worth of retail investors over the past 10 years. It seems quite a few are now twice bitten, once shy. (for good reason) To date retail investor sentiment has remained sceptical with bond inflows far out pacing equity in flows over the past several months.
In this video clip FT.Com Aline van Duyen examines why retail investors may not be buying this rally.
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