Positive stock news
March 6th, 2007 by Remon
After the dive of the global stock markets last week, things start to look positive again. Today, the 5 day downward trend was broken by the European stock markets in reply to the Asian market recovery.
If you didn’t buy stocks over the last few days I suggest you do so if you can. The market downturn of the last few days is nothing to worry about. Trent at thesimpledollar.com wrote an article about why he bought more stocks. I agree with most points he makes but he didn’t tell why the western world panicked.
I think the main problem was the low interest rate on borrowed yen’s. As a result investors borrowed money in Japan to buy stocks in western countries, making a profit on borrowed money. Many people do this. When the yen rose the investors had to sell their stocks to pay of the debt caused by the higher yen.
This alone should not be enough for a global panic reaction. China started talking about 10% tax on stock profits causing many people to sell. This in conjunction with the fact that people in europe and maybe even in the USA got scared that china would start to dump some US dollars caused the panic reaction. As you probably know, when China start dumping US dollars the USA will go bankrupt, most likely causing a global stock market crash and recession or even depression.
Anyway, the stock market seems to pick up again. I’m going to buy some stocks myself today so I can ride the upward trend later. See it as stocks on sale 