It is a great article that one. Whichever way you read it, the...

It is a great article that one. Whichever way you read it, the losers are the countries that refuse to play the devaluation game. They will likely all get sucked in in the end but for now, China, Europe, Australia but to name a few stand out as having (from a stock market perspective) been the losers. Add Japan to that until their recent aggressive actions

I think what AEP leaves out (maybe he is saving it for a follow up piece) is what are they going to do about it. ? Well, I think Korea will devalue. China ? Not so sure. I think they would like to but if they do there will be capital fleeing their country like a tide rushing out and that will likely be the death knell for their property market.

Australia ? Well, I believe our leaders will be the absolute last people to get it. We suffer from both a leadership deficit where we are lead by people of a certain vintage who generally have little international perspective and we have a Central Bank that while somewhat credible from a currency perspective, is prone to navel gazing, inertia and ponderousness. Think I sound harsh ? Remember the interest rate hikes into the 2008 deflationary bust. "Make way for the mining boom" and "positive price signals" of a very overvalued property market... to name but a few.

I think all this means from an XJO point of view. We continue to relatively under perform other markets. Aussie fixed income though (in the long end) a full blown bull market been in swing for 5 years but you'll never read that in the Fairfax press !