Cash streams back

a small but increasing stream of money is finding its way back into some emerging markets.
Last year, I advised investors to lighten up on emerging markets.
That proved to be the right call.
The Chinese market is now below the levels last seen in late 2009. India and Brazil have lagged world markets as has Russia. But usually you want to begin to invest in these markets before their stock markets turn.
Today, I think it may be the right time to start nibbling in the area. Here’s why. The increase in commodity prices was a major negative for many emerging markets, notably China, India and Brazil.
Their factories are voracious users of energy, such as oil and coal and a host of base metals and agricultural food stuff. When prices of these inputs go up, combined with a fast growing economy, inflation follows quickly.Many emerging market governments have had to contend with this problem by tightening credit and raising interest rates over the last two years.
When commodity prices come down, as they have done over the past four months, it relieves some of the inflationary pressure and allows governments to loosen monetary policy a bit. Direct your inquiries to Bill at (toll free) or e-mail him at [email protected] . – AFP.