07/18/2006

Sssh! Don't look now, but interest rates are rising in Japan

Hello:

Amidst all the thrashing about of the markets, and the excitement of earnings announcements, not to mention the tinder box situation in the Middle East -- something else very important happened. The last major source of cheap money, Japan, just raised their price by raising interest rates. Mr. Toshiihiko Fukui, the governor of the Bank of Japan, commented that the economy of Japan "is likely to expand for a sustained period" and that the "risk that the economy will fall back into deflation is almost completely gone."

Due to the hike in interest rates in Japan, your mailbox may not be stuffed with many more 0% credit card offers because Japan was the last major source of cheap money.

We are happy to be back in the office after a brief vacation that combined business with pleasure.

You may recall reading in our Weekly e-Update of July 3rd, the comments regarding "...the stability of the financial system is closely linked to...the stability of the Middle East." The market activity of last week sure proved our foresight to be accurate.

Terri G. Millson, CIMA, CIMC President

Ray Dicius, CSA, GEPC LPL Branch Manager