What is the World Economy Future?

Myanmar cyclone on 2008.05.04 ruins the country and wipe out lot of crops, China earthquake on 2008.05.12 collapse most of the building in Sichuan and they need lot of raw material to rebuild, and the crude oil price hit USD135 on 2008.05.22. There is an inflation worry.

All these will bring inflation fear and lot of things is under pressure to raise the price. When the prices rise, it will hit the sales volume. Everybody may start to reduce spending. The sales drop will pull down the company result. This chain effect will hit the economy world wide.

The rise of food price is also due to the fighting resources of crops and the biofuel plants. The commodity price of the biofuel related plants sustain high and it can cover the high fertilizer price while if the price of food crops don’t rise, farmer will switch to grow commodity rather than grow crops.

China earthquake will need lot of energy and raw material to rebuild their home. The building material and energy such as steel, cement, timber, and fuel will have great demand and it will bring up the price of these raw material if the supply cannot fulfill the demand. The rise of these prices will hit construction, properties, and other manufacturing sector and their cost will increase dramatically. Their profit will be thin down and giving them forces to increase the price too.

In Malaysia, the political tsunami seems still haven’t over yet. The unstable of the government and worry behind the scene will keep the investors side line. Most of the investor is looking each other’s reaction, watching what will happen then, and waiting for the economy report and company result.

Economy slow down and advice only invest in selective sector and buy as low as when it dips. Remember to take profit once it goes high.