Wednesday, January 12, 2011

Inflation Risks

Dear Subscribers,

We want to flag the increasing risk of inflation which is creeping back into the input prices as reflected by today's market data - inflation is not good for interest rates especially in markets that target central banks with Inflation Targets (i.e. most of the world) - this means higher interest rates in due course.
In this fragile recovery environment the risk of increasing rates can easily destabilise recovery. With world demand for raw materials up there is only one way for rates as the recovery becomes more progressive.

This risk should be factored into your future investment decisions.

The Dre Markets Team.

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