inflation surprise hits australian shares, page-7

Hi dan01,

I dont think our market just reacted to the inflation numbers. Our market was already on a steep curve down in the morning well before these numbers came out. (Of course, the inflation rate may well have been leaked well before they were announced)

I think what has caused a drop in our markets is the sudden large increase in inflation ( if you check the previous quarter for inflation it was 0.4%... it was 1.6% this quarter so a relatively large increase ) plus the worrying economic data that caused a 1% drop in the chinese markets the day prior.

So I think it may have been a combination of both of these factors that may be weighing on our markets.

I think you may have confused accelerating economies with accelerating markets . I think you will find that most of the western economies are pretty much going nowhere economic wise... it's just with all the extraordinary amount of money being printed and passed on via cheap borrowing rates from the US govt the banks and financial institutions are artificially pushing the markets a lot higher using this cheap money than they should be based on current economic strength ( in my opinion ).

With the DOW up a lot overnight again with whispers of Bernanke possibly continuing the QE2 it will be interesting to see where our market goes... do we follow our fellow Americans or do we follow the Chinese to whom our economies fate is tied to by the mining umbilical cord?