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The managers at Mauritius-based Atyant Capital, who run the successful India Fund, believe that the impact of energy prices and Chinese/Indian demand on food is likely to multiply the effects of global inflation. One of the unique global developments over the last decade has been China and its export of deflation around the world. It has been the key reason for Greenspan's now famous "conundrum" of bond markets.

Opalesque Note: “"There is little doubt that, with the breakup of the Soviet Union and the integration of China and India into the global trading market, more of the world's productive capacity is being tapped to satisfy global demands for goods and services. Concurrently, greater integration of financial markets has meant that a larger share of the world's pool of savings is being deployed in cross- border financing of investment. The favorable inflation performance across a broad range of countries resulting from enlarged global goods, services and financial capacity has doubtless contributed to expectations of lower inflation in the years ahead and lower inflation risk premiums. But none of this is new and hence it is difficult to attribute the long-term interest rate declines of the last nine months to glacially increasing globalization. For the moment, the broadly unanticipated behavior of world bond markets remains a conundrum. Bond price movements may be a short-term aberration, but it will be some time before we are able to better j......................

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