three possible doors...

Of the three possible economic ‘doors’ listed below, I would propose that we begin watching closely what happens in the commodities markets going forward…the other two indicators have data lag times!

The Economist ran an interesting article over the weekend noting the possiblemarket responses to quantitative easing. According to the article, “There are three possible outcomes.

• One is that the economy remains stagnant with inflation low, as in Japan;the right strategy in those circumstances would be to buy government bonds.
• Another is that the economy recovers to pre-crisis growth levels;the right strategy then would be to buy equities.
• The third possibility is that inflation accelerates rapidly as central banks lose control;in that case, buy commodities, especially gold.”

The Market Today ONLINE