Monday, January 24, 2011

$1 Trillion To Pour Into Emerging Markets in 2011: Global ETFs To Shine

The IIF, Institute of International Finance, which represents over 430 financial institutions in 70 countries, says private money will pour into emerging markets in 2011, reaching over $1 trillion by 2012.

The IIF warns that curbing the effects of capital flows is becoming increasingly difficult.

These inflows will heat up currencies and global stock markets.

We track all currency ETFs live here, and all global ETFs here. There is quite a selection of them to choose from.

The IIF also said the October capital inflows projection for 2010 was $908 billion, a 50% higher than in 2009.
From Yahoo. "IIF chief economist Philip Suttle told a news conference that although inflows were growing, the ratio of flows to emerging market gross domestic product was still well below levels seen in 2005-2007.

Still, the surge of private capital had complicated policies in emerging markets, which are worried by the potential for inflation, asset bubbles and a loss of export competitiveness.

Some countries, such as Brazil, which has one of the world's most overvalued currencies, Chile and Colombia, have imposed capital controls to slow the flow of hot money.

Suttle said many emerging market countries were choosing to accept a higher rate of inflation when in his view they ought to allow their currencies to appreciate".

Mr. Suttle says this was a worrying trend and that emerging markets as a bloc should coordinate and agree "to appreciate their currencies a little more and take more of the necessary adjustment on the nominal exchange rate side."

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Deming said...


Heard a commentator remark yesterday that a cheaper pair of Nike shoes in the U.S. @ $35-$0, easily costs more than $100 in Brazil. Same shoe, different country.


The Shocked Investor said...

Yes, those prices are absolutely right, but it is not related to inflation per se, it has more to do with their high taxes. It is something they are trying to reform.

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