A look at 2008

Lets step aside and take a glance at what may be some big 2008 potentials:

1. Investors returning to metals.

We've seen a huge growth in the price of gold in 2007, it may very well surpass $1000. Look for an appreciation in AUD. CAD may very well benefit from it as well as 45% of their country's GDP comes from gold.

2. Oil prices drop

Most of the presidential candidates are pushing for the "Green Movement" - utilizing bio diesel fuel,solar energy, hydrogen energy,etc. as a mainstream basis of energy. With the likelihood that Obama will take the victory, lets take a look at what his outlook is like on energy and environment:

Reduce Carbon Emissions 80 Percent by 2050
Invest in a Clean Energy Future
Support Next Generation Biofuels
Set America on Path to Oil Independence
Improve Energy Efficiency 50 Percent by 2030
Restore U.S. Leadership on Climate Change

What does this mean? Oil prices down , CAD ++

3. YEN YEN YEN

Carry trade pairs are my favorite pairs, not just because my last name is Yen. We are looking at the unwinding of the Japanese Yen carry trade due "broad-based risk aversion". Simply, investors have historically borrowed Yen cheaply to invest in global markets. We see this in the long term charts for currencies like GBP, USD, NZD, etc. Due to predictions of spiraling high-risk markets(equities + commodities), investors will be likely to close out their long GBP/JPY, USD/JPY, NZD/JPY trades therefore buying back the Yen and pushing it to levels as high as 140.

4. Yuan being revalued

The US was the only country to come out of the olympics with a profit, all other countries took losses. The market in China has skyrocketed in 2007. I remember speaking with a few clients and they would tell me their strategy on buying stocks - pick a random company and dump money. The olympics is not just about competitive athletics - its a multi multi billion dollar business. Right now China is flooded with tourists, businesses are booming, but what happens when the 2008 Beijing olympics are over?

5. Federal Reserve cutting interest rates

Doesn't seem the Reserve is done cutting rates yet. The country is in recession and the monetary policy NEEDS to be changed. Our money used to be backed by gold and silver, but nowadays it's just being printed out of thin air from the Federal Reserve. When the Reserve cut rates, they are simply printing more money because the government asks of them to. Most people dont even realize that the Reserve is nothing but a cartet of banks and doesn't even have ANYTHING to do with the government - it's a seperate entity just like the IRS. The country is screwing itself over for a lack of better wording, due to its foreign policy and the middle class is taking a huge hit(as always). The amount of money that we borrow from China is so extravagant that if China were to decide to sell off 5% of their U.S. treasuries, our stock market would collapse - panic would flood the markets, and that would inevitably lead to the downfall of the country. Too bad the only presidential candidate who understands this, Ron Paul, is ignored or bashed by the media.
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Lets keep our eyes peeled for good opportunities this year. I took a few big losses early on in 2007 but have revamped my whole strategic approach and mindset since.

"Keep on going and the chances are you will stumble on something, perhaps when you are least expecting it. I have never heard of anyone stumbling on something sitting down."
- Charles F. Kettering,