The reflation trade is best exemplified by the belief that emerging markets will lead the developed world out of recession. Better hope so or the record hot-money flows into emerging market equities could reverse, giving boring currencies like the dollar a boost.
I retain my well-worn skeptism that it’s “different this time” and a bunch of export-dependant economies will suddenly start exporting to each other in volumes sufficient to offset diminished demand in the US and Europe. Call me old-fashioned…
