Andrew Dalton, asset allocator and managing director of Dalton Strategic Partnership, describes the crucial macro themes impacting his investment decisions today.
1. The end of QE2 The big question is: what will happen after the end of QE2 in June? Excess liquidity is pushing up the price of assets globally, such as the price of London housing. It is also pushing up the price of shares and pushing down bond yield levels. We are carefully watching the speed at which the real economy is absorbing the excess liquidity as that tells us the point we are at within a bull cycle. 2. US fiscal consolidation The US is the only AAA-rated country without a fiscal consolidation plan in place. Standard & Poor’s is telling the US government to ‘wake up', ...
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