With sky-high growth potential, China and India are the two markets no investor can afford to miss out on. But that doesn’t mean they’re impervious to market turbulence, and in times of trouble, India is the more reliable investment.

No doubt, both countries’ markets are suffering this year, with China’s Shanghai A Index down 50%, and India’s Sensex Index down 25%. It’s no secret that India is struggling with both a growing budget deficit and mounting inflationary pressure. But China has problems too – it’s just hiding them under the carpet until the Olympics are over.

That’s why, for me at least, the investment decision is clear – I’ll buy the country whose problems are out in the open and already reflected in stock prices. Read the rest of this entry »

Crude oil prices slipped below $119 a barrel on the New York Mercantile Exchange yesterday (Monday) for the first time in three months as tropical storm Edouard veered away from energy facilities in the Gulf of Mexico, and a government survey that revealed U.S. consumer spending flagged in June.

Light, sweet crude for September delivery tumbled $3.69 to settle at $121.41 a barrel yesterday, after earlier dropping below $119 a barrel for the first time since May.

Part of the reason for the decline was that tropical storm Edouard lost strength and turned westward to miss vital oil facilities in the Gulf of Mexico, but declining demand is probably the biggest figure in oil’s slump. Crude fell 11% in July after more than doubling in price over the 12 months prior. Read the rest of this entry »

It is no secret that we face an electricity crisis in South Africa. Eskom have just not been able to cope with the increase in demand of electricity due to the growing economy. The government and Eskom are trying to find a solution to the electricity crisis. There are suggestions that new power plants have to be built over the next couple of years and more coal will need to be secured inorder to power these plants. Funding for this expansion has not been easy as consumers seem to be the main contributors to the funding with electricity tariffs set to rise.

There have been calls by many to find alternative means of power to help increase the supply of electricity in South Africa. Many wonder why there has not been a major drive to start using more and more solar power. After all, we are in South Africa where we get a lot of sun shine through out the year. There are many countries in Europe using solar energy and they do not get as much sun shine as we do in South Africa. The cost of setting up the solar power infrastructure is relatively high but it would be a good long term investment. Read the rest of this entry »

Oil’s recent wild ride has some market experts questioning which way black gold is headed in the weeks, months, and even years ahead.

Oil dropped over 11% during a volatile week of trading, as reduced consumer demand put downward pressure on the once hot commodity. Crude oil for August delivery ended the week at $128.88, its lowest level since June 5 and well off its July 11 peak of over $147 a barrel.

“If this is not the [crude oil] bubble’s implosion, than it’s a reasonable facsimile,” analyst and trader Stephen Schork said in his daily market commentary, the Associated Press reported. “Perhaps all we have witnessed was a replay of last August’s subprime induced sell-off. Time will tell.
Nevertheless, for the time being we no longer care to hold a bullish view.” Read the rest of this entry »

As South Africa continues to battle against the rising inflation, it is worth noting that it is not only South Africa facing higher food and energy prices but larger economies such as the US are also battling inflation as is noted below by Jason Simpkins:

Consumer spending, which accounts for more than 70% of the economy, will be seriously threatened in the months ahead, as prices continue to rise, wages plateau, and government stimulus checks wear thin.

Consumer spending has remained strong in recent months, even jumping 0.8% in the month of May. But that boost was largely inflated by the $50 billion in government rebate checks that were cashed and put to use in the month. Read the rest of this entry »

Since gold traditionally rises with inflation, that means now is probably a good time to add to your holdings.

Here are the essential facts:

At one time the world’s monetary system was based on gold. It is a universally recognized store of value. It can be bought and sold in any country.

And it is scarce. There are 4 billion ounces of gold in people’s hands, enough to fill a cube 60 feet on a side. Of this, investors own 1 billion ounces, and central banks another billion, with the remaining 2 billion ounces accounted for by jewelry and other baubles. Read the rest of this entry »

Inflation is spreading like wildfire around the globe, and while not every country is hurting as bad as Zimbabwe with its mind-boggling 2.2 million percent inflation, the United States and Europe are definitely still getting scorched by rising prices.

U.S. consumer prices, as measured by the Consumer Price Index (CPI), increased 1.1% in June, the Department of Labor reported yesterday (Wednesday). That brings the inflation rate for the past 12 months to 5%, well above the U.S. Federal Reserve’s preferred target of 2.0%.

The increase was higher than expected as a 6.6% jump in energy costs and a 0.8% rise in food prices helped to boost CPI up past the expected rate of 0.8%. So-called core CPI, which excludes highly volatile food and energy costs, was 0.3% — higher than its expected rate of 0.2%. Read the rest of this entry »