The end of the tightening cycle could bode well for the Brazilian stock market and the popular iShares MSCI Brazil exchange traded fund.
It appears that the market is pretty convinced that 2012 will see inflation decline considerably for most of these major markets, meaning a possible end to credit tightening and stead growth into 2013, all positives for long term investors in the BRIC markets.
On the other risk, a real tightening of monetary policy, Winmill explained that the end of QE2 acted like a tightening of 300 basis points along the middle of the curve.
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The report also called for an end to the ever-tightening restrictions being placed on access, arguing there should be a national standard so everyone had the same access no matter where they lived.
The report went so far as to suggest that base rates should be back at 3.5% by the end of 2011, with tightening to start "no later than" the last three months of 2010.
Both Brazil and China are likely coming to the home stretch of their tightening cycle, meaning an end to raising interest rates to cool demand for credit.
Most analysts think that the current cycle of monetary tightening is at or near its end, particularly since the latest GDP figures were so disappointing.
While sales of less expensive homes struggle to manifest under ever-tightening mortgage lending practices, the luxury end is comprised of home buyers with money to throw down.
In a year-end note to investors, fund manager Bill D'Alonzo cited tightening profit margins, among other worries, as reasons for selling.
After 18 months of credit tightening and new home buying restrictions, we may be at the end of the cycle, and they are likely to be much different.
No longer focused on the need for dramatic hoarding of cash to survive a potential 2nd Great Depression, even in a temporary setback created by government belt-tightening, corporations will be able to see the light at the end of the tunnel, and begin investing for growth again, spending some of that cash hoard in preparation for better times ahead.
The lagged effects of European fiscal austerity and Chinese monetary tightening should be having an impact by then, and the Federal Reserve's QE programme will end in June.
Whatever it does, America is currently on course for the most stringent fiscal tightening of any big economy in 2012, as temporary tax cuts and unemployment insurance expire at the end of this year.
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