The inflation/deflation debate is hot… It crackles and pops like a pine fire. But it gives off little helpful light. Abe Lincoln may have read by the light of an open fire. But when we tried it, we singed our eyebrows. It made us suspicious of Old Abe; maybe he wasn’t quite as truthful as he pretended to be. Later, we realized he was a mountebank. But that’s another story…

Today, we light a candle and try to interpret the shadows on the wall…

Yesterday, the Dow fell 81 points. Gold dropped $5 to $1009.

Will the feds succeed in causing inflation? Or will they fail? Will the dollar continue to go down? Or will it prove to be a safe haven currency in a time of deflationary trouble?

According to the papers, the feds have already done it. “Fed says recovery underway,” says a headline from yesterday’s press.

Another headline tells us that

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In an odd bit of capitalist irony, the U.S. banking crisis could end up as the catalyst that finally jump-starts the long-moribund market for initial public stock offerings (IPOs). In fact, it already appears to be happening. U.S. banks - under government order to raise capital as a result of the recently completed bank stress tests, and desperate to shed the onerous shackles of the U.S. Treasury Department’s Troubled Assets Relief Program (TARP) - have been announcing billions in secondary stock offerings in recent days, and experts say many more such deals can be expected. Anadarko Petroleum Corp. (NYSE: APC), Bank of America Corp. (NYSE: BAC) and Ford Motor Co. (NYSE: F) yesterday (Tuesday) became the latest U.S. companies to pursue new sources of capital, announcing deals that involved offerings of stock or debt, or outright asset sales. Those announcements ...

Like much of the world, China is going through a rough patch. But Louis Basenese says there are many reasons why now is the perfect time to invest.  He recommends four companies for big gains when the market gets back to winning ways.

It’s time to make a big bet and begin investing in China.

I know. It’s not exactly a popular stance. And the smart money is doing exactly the opposite. Or so it appears…

Yesterday, the Royal Bank of Scotland hit up the China ATM for a $2.37 billion withdrawal. It sold its entire 4.3% stake in Bank of China. And a week ago, Bank of America cashed out part of its stake in China Construction Bank Corp. for an estimated $2.83 billion.

Making matters worse, the MSCI China Index lost a record 53% last year. It’s counter-intuitive and near impossible to rationalize adding money to a losing investment…

Investing In China -

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Investing in China: 11 Reasons Why & 6 Ways to Buy

by Louis Basenese, Advisory Panelist, Investment U Associate Investment Director, The Oxford Club Wednesday, January 14, 2009: Issue #915

It’s time to make a big bet and begin investing in China.

I know. It’s not exactly a popular stance. And the smart money is doing exactly the opposite. Or so it appears…

Yesterday, the Royal Bank of Scotland hit up the China ATM for a $2.37 billion withdrawal. It sold its entire 4.3% stake in Bank of China. And a week ago, Bank of America cashed out part of its stake in China Construction Bank Corp. for an estimated $2.83 billion.

Making matters worse, the MSCI China Index lost a record 53% last year. It’s counter-intuitive and near impossible to rationalize adding money to a losing investment…

Investing In China - 11 Reasons Why It’s Time

Here are 11 reasons why

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Emerging Market Funds Lose $48 Billion; Bank of America Sells China Bank Shares; Family Dollar Beats and Raises Forecasts; New CEO, Cost-Cutting at Orbitz; Russian Winter; Monsanto Reaps Profit; No Pain Means Gain for Sun; Oil Slides 12%

More than $48 billion was withdrawn from emerging market funds in 2008, with the largest chucks of change pulled from funds tracking Asia, according to EPFR Global. An emerging markets bellwether, the MSCI Emerging Markets Index, dropped 54% last year, its worst performance since it was created in 1987, Bloomberg reported. Bank of America Corp. (BAC) sold 5.62 billion of its China Construction Bank Corp. shares, raising $2.83 billion. Based on the Construction Bank’s IPO price, Bank of America realized a profit of about $1.13 billion, Reuters reported. Bargain retailer ...

Bank of American Corp. (BAC), which is getting $15 billion from the U.S. government as part of the Treasury Department’s $250 billion “recapitalization” effort, is doubling its stake in state-owned China Construction Bank Corp., and will hold a 20% stake worth $24 billion in China’s second-largest lender when that deal is finalized.

PNC Financial Services Group Inc. (PNC), which will get $7.7 billion from Treasury’s Troubled Assets Relief Program (TARP), is using that cash infusion to help finance its $5.2 billion buyout of embattled National City Corp. (NCC).

And U.S. Bancorp (USB), which received a $6.6 billion capital infusion from that same rescue package, has acquired two California lenders – Downey Savings & Loan Association, F.A., a subsidiary of Downey Financial Corp. (DSL), and PFF Bank & Trust, a subsidiary of PFF Bancorp Inc. (OTC: PFFB). U.S. Bank

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Bank of America Corp. (BAC) will almost double its stake in state-owned banking giant China Construction Bank Corp., and will control nearly 20% of China’s second-largest bank when the deal is finalized. The official announcement yesterday (Monday) ends months of speculation that the Charlotte, N.C.-based BofA would dump part of its three-year-old investment the Beijing-based bank to offset the effects of the global financial crisis. In an article on Saturday, Money Morning reported that the deal was close, though noting that the actual timing was unknown. Bank of America plans to be “a long-term and significant strategic investor in CCB,” the U.S. lender said in a statement. The shares to be acquired to carry a restriction, however: They can’t be sold before Aug. 29, 2011, unless the China bank provides special permission. According to Caijing– the influential China ...

Bank of America Corp. (BAC) will likely boost its stake in state-owned banking giant China Construction Bank Corp., paying about 36 cents a share (2.46 yuan), or 1.2 times the Beijing-based lender’s book value, China’s Caijing magazine reported last Friday, citing unidentified sources.

No timetable or total dollar value for the deal was given. The magazine report was picked up by the Reuters wire service, and by other U.S. media outlets, such as Forbes.com.

To smooth the way for the share purchase by Bank of America, Central Huijin Investment Co. Ltd. - the investment arm of the People’s Bank of China that’s run by the Ministry of Finance - has asked China Construction Bank to audit its third quarter results using international accounting standards.

Caijing, an influential Chinese-language business-news publication, said it did not know how many shares that Bank of America intended to buy.

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