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China’s reserves and purchases of US treasuries Annualized monthly change ($bn) |
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We enter the year to a deafening beat of bullishness. The long rally since the lows of March last year has brought US and European equity prices back to 70% of their peak in March 2000. Optimism rules and the consensus is for further upside in 2004.
By mid-year, though, I reckon the message will have changed. Why will this happen?
First, globalization is continuing to destroy corporate pricing power in the US and Europe.
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