Real Estate is truly the "Toast of the Town", enjoying a concentration of capital from investors such as Centum Investments which hopes to increase its exposure to the sector by 60000% in four years. The limited amount of capital in any nation leads to a sector boom and bust at a time. Only in hyperinflationary times due all asset classes ascend in price as a direct result in the loss of confidence and therefore purchasing power of the currency.

Real Estate is the most widely held asset class. Its appreciation leads to a broad based "wealth effect" in a nation. The U.S. property boom comes to mind when property owners were re-financing to receive monies for discretionary spending. The inevitable bust lead to a credit crunch and deterioration of the financial health of mortgage lenders and real-estate developers.

"Centum Investment expects assets under its management to more than triple by 2014, as the country’s only listed investment firm focuses on private equity and real estate.

Traditionally, investors have been wary of pouring funds into Africa, which has a reputation for corruption and red tape. But some experts argue recent events in Europe and the United States have shown that even advanced markets are far from risk-free...."

Read more:

http://www.standardmedia...sset%20base%20by%202014

True to form, the ECB President Jean-Claude Trichet has taken the political party line by denouncing the volatility in the markets as a result of the European Debt Crisis. Perhaps, he has chosen to ignore the teachings of history. Debt Crisis almost always lead to economic (not stock market) depressions and the end of empires.

Let us turning the leafs of our history books to 1931. Great Britain, global superpower, had to secure a debt moratorium from the United States of America so as not to default on its debt like the rest of Europe (except Switzerland). This marked the zenith of its peak as a superpower, handing over the mantle to the United States. Between 1931 and 1933, the British Pound lost 64.8% of its value versus the Dollar due to the flight of capital from the former to the latter. If we are to extrapolate that move to the Euro from the July 2008 high of $1.59 would provide an extreme price target of $0.59. Bear in mind that the lowest close for the Euro was $0.82 in 2000. A breach of $1.17 on a monthly closing basis and its time to get the lifeboats.

Players in the import-export sector best monitor the Euro, hoping that it breaches $1.35 and retests it as support. Horticulture firms may get their fingers burnt from a plummeting Euro and a rocket propelled Dollar. Cyclical analysis by Martin Armstrong points towards increasing market volatility into 2011.

"The world should not write off the eurozone, the European Central Bank president said on Thursday, as a surge in German exports highlighted Europe’s economic resilience.

Moving to shore up financial-market confidence in the 16-nation bloc, Jean-Claude Trichet said that global gloom over its prospects was overdone. Economic data “are not confirming this pessimism”. A double dip into recession “is not at all what we are observing”, he added.

His comments underlined ECB confidence that emergency measures to stabilise Europe’s 11-year-old monetary union are taking effect. Mr Trichet even cited this weekend’s all-European football World Cup final between the Netherlands and Spain as a reason “one should not underestimate Europe”....

Read more:

http://www.ft.com/cms/s/...-8e17-00144feab49a.html

As surely as night follows day, China will replace the United States as the economic superpower. The Middle Kingdom is actively advocating for its citizenry to purchase gold as a store of value and safe haven contributing to the 57% increase in investment demand. Gold investors are enjoying the twin benefits of Yuan appreciation and the yellow metal's shine.

In a recent announcement, the state-controlled China National Gold Group signed a multi-year lease to purchase gold from the Kensington Mine in Alaska.

"China’s consumption of gold is soaring alongside the price, as the Asian economic superpower and its citizens increasingly turn to the precious metal as a way to diversify their finances.

Gold prices have risen so quickly – 11.6 per cent in the last quarter alone and 84 per cent in the past three years – that it is becoming out of reach for some of the world’s jewellery buyers and investors. Yet even at about $1,200 (U.S.) an ounce, Chinese demand from both is soaring. Retail investment demand in China rose 57 per cent in the first quarter of this year from a year ago, while jewellery demand increased 11 per cent, according to World Gold Council estimates...."

Read more:

http://www.theglobeandma...ld-rush/article1626211/

Please review the U.S. Dollar vs Kenya Shilling chart (http://tinyurl.com/38ljemb) for a technical view on cross-currency movements.

"The weakening of the local currency is expected to pile pressure on the country’s balance of payment, eroding gains from the recent surge in exports.

The shilling’s slide will make imports more expensive although exporters are expected to benefit from the windfall.

For instance, the shilling is exchanging at Sh81 to the dollar compared to Sh74 a year ago, meaning importers will spend seven shillings more to buy a dollar...."

Read more:

http://www.businessdaily...6/-/kh9uww/-/index.html

Contagion watch.

"Moody’s cut Portugal’s sovereign debt by two notches to A1 from AA2 on Tuesday — but European markets seemed rather relaxed about it.

The rating agency explained its downgrade thus:

Moody’s believes that the Portuguese government’s financial strength will continue to weaken over the medium term, as evidenced by the recent and ongoing deterioration in the country’s debt metrics. “The Portuguese government’s debt-to-GDP and debt-to-revenues ratios have risen rapidly over the past two years,” says Anthony Thomas, Vice President – Senior Analyst in Moody’s Sovereign Risk Group. “This deterioration came about due to the government’s anti-crisis measures and the operation of the budget’s automatic stabilizers, such as higher unemployment benefits, when the economy went into recession....”

Read more:

http://ftalphaville.ft.c...al-to-a1-markets-shrug/