Jim Letourneau's Blog

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Read and Ready Yourself for the Risks

Life is full of risks and speculators are required to take measured risks on a regular basis. Economists are starting to talk about risks facing the global economy and GASP! there is even some agreement.

Fred Bergsten has an article in the Economist that outlines five of them:
The risks ahead for the world economy

  1. Renewed sharp increases in the current-account deficit leading to a crash of the dollar.
  2. A budget profile that is out of control.
  3. An outbreak of trade protectionism.
  4. China, which faces a possible hard landing from its recent overheating.
  5. Oil prices could rise to $60-70 per barrel even without a major political or terrorist disruption, and much higher with one.

Marc Faber's www.gloomboomdoom.com posts insightful market commentary on a regular basis. His most recent "Market Comments" features, an article by economist, Krassimir Petrov, that eerily enough also lists five risks:

  1. A worldwide currency, banking, or derivatives crisis.
  2. A U.S. recession.
  3. The containment of runaway inflation.
  4. The disappearance of Chinese trade surpluses.
  5. An oil supply crisis.

Energy is a bullish and wide ranging theme featured in the Big Picture Speculator.