What I learned from Dr. Michael Ivanovitch – 28 April 2010

Seminar subject;

• Outlook for World’s Financial Markets
• The Impact of EU’s Sovereign Risks on Turkish Economy

ECB

• Bank lending too low
  It want recovery unless it runs the other way
• The interest rates won’t go up any time soon
• Potential GDP growth 2%

US

• Potential GDP growth 3%
• Banks’ capital base have eroded, therefore trying to rebuild back

Indonesia

• Potential GDP growth 6%

! Savings rate UP Trade surplus UP; it is not related to currency

Other notes

• Transition to a stable and sustainable growth.
• Errors of monetary policy are possible, especially in countries whose economies are just booming out or are in the very early stages of recovery.
• Investors should favor asset markets where economies are already on the recovery path, and where stimulus packages are being reviewed.
• Equities and commodities are our preferred asset classes. Fixed-income instruments will experience a serious downward correction.
• The Euro will be intact and a cease of using Euro will not be the case.