Behind the corner

In previous statements, I defined november 2008 as the definite bottom of this current business cycle and we belong in the first phase of four. This is still my view. It is supported by typical characteristics such as decreasing interest rates and revival of business cycles sensitive stocks. We are awaiting phase two - better times and increasing interest rates. Leave the stock market...

Today´s comment is about state debts. During the financial crisis in the 90´s credit markets dried up and cost on risk increased. Countries with weak state finances had difficulties finding new financing an their currency were devaluated. The financial crisis became debt crisis - exactly the same we see today in Greece. The difference is Greece has a Euro. So, expect the Euro to experience some stress.

Down the road we have other countries with great debts such as Spain, Ukraine etc. If no financing you could find some very attractive investments opportunities but, at least for Spain, I would wait until the next recession.

The UK and USA belongs to the same category but they can finance through their own bank and, by doing that, exercise "The Zimbawe school of thought". Prepare yourself for some pretty good inflation... Buy a house in the UK and USA with highest bank financing you can afford!