Which stocks have been winners in the shift? Precious metals and emerging market currencies are hitting all-time or multiyear highs. And rising inflation is the key - investors who believe inflation can be tamed are buying currencies in countries where central banks are raising interest rates to control prices. Those higher rates make the currencies more attractive, leading to big flows of capital into those countries. Just this year, central banks in at least 18 countries have raised interest rates. China, Israel, Brazil, India, Poland and Uruguay are just a few countries that stem from the diverse list. Other central banks, such as those in Asia, are actually battling investors who are bidding up the value of their currencies in order to protect the competitiveness of their export industries.
Monday, we'll continue the series on "inflation and the stock market." Be sure to follow us here on the Money Matters link at connectmidmichigan.com!
