"Felix Zulauf's article and prediction is similar to recent newsletters of Jeremy Grantham and Jim Grant. Grantham has been saying for some time that he expects the next bubble to occur in emerging markets and commodities. I believe we are experiencing some warning shots, though there are usually a number of these before any true burst. Grant has used numerous references to state that he believes that inflation, a problem already, is understated as to it impact on China's citizens. A significant correction is certainly a possibility in Asian markets and Commodities, though we must be diligent in watching charts and support levels to be careful to not jump the gun.
"However, this should be a correction and nothing like a meltdown. The good news is that corrections would lead to wonderful and enticing opportunities to add to energy, natural resource shares and commodity speculation, if that is one's forte. And if we do see the dollar strengthen considerably, I believe it will offer an interesting chance to take positions in Asian currencies, especially Hong Kong and Singapore $s. I cannot see how Hong Kong can remain pegged to the U.S. dollar. It has been about 8 years of watching emerging markets and natural resource shares, and I have come to the conclusion (speaking for myself) that before this Secular Bull comes to an end, we will have many opportunities to buy off corrections in the Fuller themes. This remains the best way to succeed in these markets--have patience, do not chase, and buy low (or relatively low since we may not see shares or commodities returning to any extreme low in the era of the China story). See Grantham's summary of "Time To Wake Up: Days Of Abundant Resources and Falling Prices Are Over Forever" on his GMO.com website.
David Fuller's view I agree, and bubbles are likely to develop, eventually, in any market sector perceived by the crowd to have outstanding fundamentals.Back to top