A quieter night on Wall Street with equities wallowing
in the red for most of the day and staging a slight recovery at the close, bond
yields up just a tad and commodity prices down slightly, more than slightly for
oil. However, US bond yields have risen
substantially in recent days and global liquidity growth is slowing noticeably
as major central banks all embark on monetary policy
tightening.

The Fin Review’s
Corinne Lim says “Spending spree belies
coming crunch” and her article includes warning quotes from the Bank for
International Settlements (BIS). The BIS warns “… to the extent that investors may have
underpriced country risk, emerging markets could be vulnerable to a repricing.”
The risk of this will increase as the world’s central banks tighten monetary
policy from the unusual ease that prevailed in the past several years. (BIS
March Report)

We cannot avoid mentioning the warnings given in our
Investments column in mid February (Goldmembers only) and in the Raff Report on
commodities published on 13 February. For coverage of slowing global liquidity
read this article from August last year.

Meanwhile Henry has been calling for debate on tax
reform for quite a while now and regular contributor Nicholas Gruen has entered
the fray:

…studies suggest that, particularly for small
countries, cutting company tax produces substantial economic gains. (That’s
just what they’ve done in some of the most successful European countries of
recent years – like Norway,
Sweden and Holland.) The same studies reveal that cutting top personal tax
rates – a subject of endless reform discussion and speculation in
Australia – doesn’t help
growth.

Read Nick’s full article at Henry
Thornton.