So, pay attention to debt data and you might see where the economy is heading.

Prof Keen argues that the cycle of growing debt always feeds into rising asset prices as the “euphoria economy” takes over. “The final stage is the emergence of “Ponzi financiers” who invest purely on the basis of rising prices.

“They do not have the cash flow to service their debts. When the cycle turns, they are bankrupt at once and are the first to go.”

You can follow his predictions at steve keen blog.

Prof Keen, of the University of Western Sydney, is author of the best-selling book, ‘Debunking Economics’.

Steve Keen Economic Prediction : Forecast is a post from: Daily Investment Tips

China Vs Russia In the Future

I love web articles but I love reader comments more. A reader left a thought provoking comment on this issue.

Let me get this straight. Russia is the largest country in the world and extends eleven time zones. It has about 140 million people and that population is declining and the Russian economy is flat at best.

Next door China has over one billion people, a growing economy and needs many of the natural resources that Russia has.

Fifty years ago, a situation like that would have brought war.

I’m not predicting war between Russia and China but it is not too far fetched to think that China might some day want to purchase part of Russia. A corrupt and weakened government in Russia just might go for it to fix short-term problems.

China Vs Russia is a post from: Daily Investment Tips

The ranking was based on which industries are hiring most in 2011. Which is a good indicator of industries that are growing.

Top Ten Growth Industries / sectors 2011

1. Office staffing.
2. Tourism
3. Education
4. Restaurants
5. Car dealership
6. Doctors
7. Home building
8. Warehouse clubs & supercentres
9. Nursing homes and elderly services
10. Supermarket and grocery stores.

Top Ten Growth Industries 2011 is a post from: Daily Investment Tips

The rise of Chinese wages.

The rural urban migration of Chinese workers from farms into factories, will slow, leading to stronger wage pressures and prices, he says. This is already happening as we have seen Foxconn the largest factory in China increase wages of its factory workers.

American Economy and Inflation

The impact of rise in Chinese wages will impact on the US economy. High prices of Chinese goods coming into the US will cause inflation.

Allan Greenspan Economic Predictions is a post from: Daily Investment Tips

I have always thought uncle Sam is too big to fail but after reading Michael Pento interview the US could be another Greece tragedy or may be, another Argentina.

Using Treasury Department’s recent U.S debt estimates that showed total U.S. debt will top $13.6 trillion this year and rise to 102% of GDP by 2015. Moreover, the publicly traded debt (debt excluding intra-governmental obligations) will rise to $14 trillion by 2015, up from “just” $7.5 trillion in 2009.

Mr Pento then calculates, At $14 trillion, the interest payments on the public debt will total about $1 trillion in 2015, he continues; even assuming solid growth and low inflation, that would equal about 30% of total government revenue. “What do you think that does to our bond market?,” Pento wonders. “It leads to a dollar crisis and a bond market crisis. That’s why gold refuses to go down. ”

If Pento is right then expect the yield on US treasuries to rise. Investors in bonds could see the value of the bonds fall.

Read the rest at the Source Yahoo Finance

Predicting Americas’ Debt Crisis is a post from: Daily Investment Tips

The central bank of India has purchased 200 metric tonns of gold from IMF.

According to this economics time article.

India is spreading its assets which are said to be currently over-weighted with foreign currency, mainly in the form of sovereign US Treasury bonds. In other words, it is a hedge against a falling dollar.

India is the world’s largest private gold consumer, but the government’s holding of gold as an asset is modest. Even so, the latest purchase puts it at Number 10 among the list of top 10 gold-holders in the world.

Of India’s current foreign exchange reserves of nearly $285 billion, foreign currency assets account for more than 90% ($268.3 billion), followed by gold ($10.3 billion), IMF’s Special Drawing Rights ($5.2 billion) and a reserve position in the IMF of $1.59 billion.

While India’s current gold holdings, accounting for just 3.7% of assets, are said to be historically low, buying 200 tons in addition to the 358 tons it already holds is expected to bump up the gold reserves to more than 6%.

As India, China and Brazil buy gold it means more Dollars sales. The dollar may continue sliding downward.

India? Total Gold Purchases : India Gold Holdings is a post from: Daily Investment Tips

“…is there some society you know that doesn’t run on greed? You think Russia doesn’t run on greed? You think China doesn’t run on greed? The world runs on individuals pursuing their separate interests. The great achievements of civilization have not come from government bureaus. Einstein didn’t construct his theory under order from a bureaucrat. Henry Ford didn’t revolutionize the automobile industry that way. In the only cases in which the masses have escaped from the kind of grinding poverty you’re talking about, the only cases in recorded history are where they have had capitalism and largely free trade. If you want to know where the masses are worst off, it’s exactly in the kinds of societies that depart from that. So that the record of history is absolutely crystal clear: that there is no alternative way so far discovered of improving the lot of the ordinary people that can hold a candle to the productive activities that are unleashed by a free enterprise system.”

Donahue then countered saying that capitalism rewards the ability to manipulate the system and not virtue. Friedman was having none of it:

“And what does reward virtue? You think the communist commissar rewards virtue? …Do you think American presidents reward virtue? Do they choose their appointees on the basis of the virtue of the people appointed or on the basis of their political clout? Is it really true that political self-interest is nobler somehow than economic self-interest? …Just tell me where in the world you find these angels who are going to organize society for us?”

Greed Is Good : Michael Friedman Interview is a post from: Daily Investment Tips