Daily Investment Tips

Prof Steve Keen is a reknowned predictor and forecaster of economy. Steve Keen economic predictions and forecast are based on analysis of increases and falls in debt. He believes the up and down in debt is the driver of the economic cycle.

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’.

written by Constantine Njeru \\ tags: Asset Prices, Best Selling Book, Debt Data, Debts, Economic Cycle, Economic Forecast, Economic Prediction, Economic Predictions, Economics, Economy, Euphoria, Financiers, Forecaster, University Of Western Sydney

In the book Age of Turbulence by Allan Greenspan. The former Fed Chief made some interesting economic predictions of US economy and Chinese economy.

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.

written by Constantine Njeru \\ tags: Allan Greenspan, American Economy, China, Chinese Economy, Chinese Goods, Chinese Workers, Economic Predictions, Factories, Fed Chief, Inflation, Turbulence, Urban Migration, Wage Pressures, Wages

George Soros is known as “the Man Who Broke the Bank of England” after he made a reported $1 billion during the 1992 UK currency crisis. He bet against the British pound and won big.

I came across a quote by George Soros, that seems to give an easy answer as to how the famous speculator makes money in a turbulent world.

The financial markets generally are unpredictable. So that one has to have different scenarios… The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.

George Soros

It is clear what George Soros does, He evaluates multiple scenarios and takes position in each scenario. As the market unfolds he lets profits run on the correct scenario and cuts losses on wrong scenarios. At a single time he might be long on a position but still take a short position on the same.

To play this scenario game you need to use risk management tools such as options, futures and short sales.  For this kind of trading to be successful an investor needs to have sufficient capital to buy those tools.

written by Constantine Njeru \\ tags: 1 Billion, Bank Of England, British Pound, Currency Crisis, Economic Predictions, Financial Markets, George Soros, Investor, Losses, Money, Options Futures, Profits, Quote, Risk Management Tools, Scenario Game, Scenarios, Short Position, Speculator, Turbulent World, Uk Currency