As a result of the increasing pressure on Congress to finish health reform and spend much more to fix the unemployment situation the United States is likely to see much higher deficits.  Thus, we have decided to investigate the impact of increasing deficits on BRIC nations and their unique economies.  Below is a chart of treasury securities held by each of the BRIC nations over the period of 2000 to 2007 (a period of relatively consistent bullish trends accross the globe, similar to what we expect for the next several years).  The data was compiled from the United States TreasuryDepartment.  The chart is followed by  a chart of GDP in billions of dollars, accounting for inflation in each of the BRIC nations over the same time period (data compiled from Index Mundi).  Analysis follows the jump:

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By CNNMoney.com

Stocks ended little changed Monday, although the Nasdaq managed to close at an 18-month high, as investors weighed corporate deals, a stronger dollar and weaker commodity prices ahead of key economic news due later this week.

The Dow Jones industrial average lost 14 points, or 0.1%. The S&P 500 index was little changed. Both ended the previous session at their highest levels since Jan. 20.

The Nasdaq composite added 6 points, or 0.3%, ending at its highest point since Sept. 2, 2008.

Stocks rallied Friday after a government report showed the economy lost fewer jobs in February than economists had expected.

But stocks drifted Monday as investors looked to a host of economic news due later in the week, including reports on state-by-state unemployment Wednesday, weekly jobless claims Thursday and retail sales Friday.

Deal news: MetLife  agreed to buy troubled insurer AIG’s American Life Insurance unit, known as Alico, in a $15.5 billion cash-and-stock deal. The deal was a positive, but not a surprise, as MetLife had confirmed last month that it was in talks with AIG.

It was AIG’s second major sale in a week as the government-owned company looks to pay back over $100 billion in bailout money it took during the financial crisis.

MetLife will pay $6.8 billion in cash, with the remainder in company stock. The deal leaves AIG as Met’s second-biggest shareholder, with a stake of over 20% in the company. Met shares gained 5% and AIG shares gained 3.6%.

In other deal news, Royal Dutch Shell and PetroChina have made a bid to buy Australia’s Arrow Energy for $3 billion in cash and stock. Royal Dutch already owns a 10% stake in Arrow.

Deal news tends to support stock gains in general, as it is seen as a sign of corporate confidence.

Company news: McDonald’s said February same-store sales rose 4.8%, as strength in overseas markets offset weakness in the United States. Same-store sales is a retail metric that refers to sales at stores open a year or more. Shares of the Dow component rose 2.3%.

Dubious anniversary: Tuesday brings the one-year anniversary of what many consider to be the bear-market low. On that day, the Dow and S&P 500 closed at 12-year lows and the Nasdaq closed at 6-year lows.

Between March 9 and the 2010 rally high hit on Jan. 19, the S&P 500 gained 70%, the Dow gained 64% and the Nasdaq gained 44%.

World Markets: In overseas trading, European markets slipped and Asian markets rallied.

The dollar and commodities: The dollar gained versus the euro and the yen.

U.S. light crude oil for April delivery rose 37 cents to settle at $81.87 a barrel on the New York Mercantile Exchange.

COMEX gold for May delivery fell $10.90 to settle at $1,124.60 per ounce.

Bonds: Treasury prices tumbled, raising the yield on the 10-year note to 3.71% from 3.68% late Friday. Treasury prices and yields move in opposite directions.

Job numbers from last month were released today and they were substantially better than expected. Employers cut a net of 36,000 jobs compared to predictions that they’d cut 50,000. Moreover, the unemployment rate remained at 9.7 percent, a stat that will likely help consumer confidence slowly rise. These numbers come at a critical time as they keep the newfound market rally going. All three major indexes are currently trading up and looking to make this week one of the best in recent memory. More to come later today.

The rapidly growing Chinese economy has recently taken a backseat to debt fears in Europe and economic woes in the United States. China should not be overlooked however as many, including Fiscal Frenzy, believe that China is set for an economic meltdown much like what the US faced due to our housing crisis. We are extremely confident that the market in China will then pull back after this bubble pops and we have found a great way to play this impending trouble. FXP is a Chinese ETF but is a short on Chinese shares. To put it simply, the Chinese markets and FXP trade inversely such that if China goes down, FXP goes up. This ETF is an easy way to profit from an eventual collapse of the Chinese housing market and economy. Once this happens FXP should rise up a considerable amount. The ETF is currently trading at $9.05 a share, which is near the 52-week low of $7.16 a share. FXP has a 52-week high of $47.92 and the all time high hit in October of 2008 was over $150 a share. These numbers show that when the Chinese economy collapses this ETF has the capability to make a run. Should the Chinese economy collapse, this ETF also provides a nice hedge against a collapse in the US markets, which would likely suffer if China dropped. Should China lead the global economy lower, FXP will be a moneymaker in your portfolio.