Brahmason's Blog

There is a huge money liquidity with decreasing sound investment options .

World wealth increase has limitations . The economy canot simply grow and grow at the speed imposed by the tremendous liquidity concentrated in fewer hands everyday .

Bubbles are responsible for that concentration and ,sustained growth is only possible if world rent per capita is better distributed among countries and individuals . If 70 % of world individuals would have a rent similar to north Europe countries , consumption would be guaranteed in quantity and quality and factories and housing would have better grounds for investment and planning .

Bubbles ocurr because money goes mainly to speculation markets as tax schemes are not appropiate and because there are not sufficient stimulous for long term direct investments .

It would not be surprising to see gold going above 1600 $ this year and it will only confirm what we are saying without further dramatic consequences . Gold is more than anything else a relief valve to world excess of liquidity lacking alternative sound investment targets .

Asia’s expansion is therefore good for world economy provided that rents are sufficiently well distributed to avoid further bubbles . Inflation , savings , rents and currency strength must be kept within a certain balance and for that , interest rates and tax schemes must be intelligently managed .

Brahmason