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1ronnie

20,922 Posts.

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11/06/18

15:57

Post #: 33634228
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Originally posted by 1ronnie ↑

https://www.copyright link/markets/...-dangerous-year-for-investors-20180607-h1138y
Put simply, the Fed's decision has great ramifications for offshore emerging markets. As the Fed mobs up liquidity unwinding its previous QE programmes and raises interest rates numerous times , money flow would move back to US from emerging markets. If you borrowed in US dollars to invest in Indonesia or Turkey, when US rates go up, your borrowing cost goes up and your margin for investing in those countries reduces shrinking risk premium and therefore you move out of those countries. To reduce impact of capital flight amidst a depreciation of their currencies, emerging markets lift their rates to protect their currencies. This is how an emerging market contagion could blow up rapidly as events spiral out of control.

There are many posts made under this Its Over thread since Feb this year including one alluding to a Turkey crisis.

We won't know exactly when it would happen but you have already ample time to prepare and take necessary steps. As I always say "Doing Nothing is Doing Something", take care.

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While we wait for the outcome of the historic meeting between POTUS and Rocket Man in Singapore, two of my covered stocks PPS and BUB have received positive reviews from smallcap newsletters, poised for a run up during the week.
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0 Great analysis

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