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IceCap Asset Management Limited Global Markets 2013.3

IceCap Asset Management Limited Global Markets 2013.3

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Published by zerohedge
IceCap Asset Management Limited Global Markets 2013.3
IceCap Asset Management Limited Global Markets 2013.3

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Published by: zerohedge on Apr 08, 2013
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Our view on global investment markets:
March 2013 – Do you believe in miracles? 
Keith Dicker, CFAChief Investment Officerkeithdicker@IceCapAssetManagement.com www.IceCapAssetManagement.com 
www.IceCapAssetManagement.comFortunately for USD Bulls – America’s big currency neighbours are alllooking a little shabby these days. In fact, in the 16 months sincepublishing
Return of the Dollar,
the Euro has declined -8%, theJapanese Yen has declined -24%, and the British Pound has declined -6%. The currency war is certainly in full swing, but the race to thebottom is far from over.Granted, this doesn’t exactly produce solid votes of confidence forthe global economy. And, believe it or not, this trend will only getstronger. In fact, investors should prepare to see the USD strengthenconsiderably against most currencies. The good news is that thisallows investors from all walks of life to position themselves to eithergain from USD strength, or to protect their capital against loss fromEUR, GBP and Yen.Unfortunately, there’s also some bad news. This upward surge in USDdoes not reflect a surging US economy or an improving fiscalcondition. To see the canary in the American coal mine, look nofurther than
Chart 1 on page 2
. Ultimately, once the effects of moneyprinting and the poor handling of debt levels has played itself out inEurope, Britain and Japan, the US too will bare the brunt of its similarstrategies. For now however, the US is last in the long line of financialheart ache.To fully understand how the global debt crisis plays out however,investors must be willing to step outside of their own domesticeconomy and financial markets, and view the World from an
March 2013 Do you believe in miracles?
The odds of winning were slim and none. Avoiding embarrassmentwas the real objective, but then something happened. Momentumchanged and the rag-tag bunch of American college hockey playersshocked not only the Soviets and their 1980 Big Red Machine, but theentire sports World.When seemingly faced with the impossible, America alwaysperseveres and finds a way to win. After winning the global economicgame for the better part of 100 years, America is once again on theropes and no one is giving her any hopes at winning, or evensurviving for that matter.America’s debt levels are disastrous. It has no money to pay futurepensions and healthcare. Economic growth is anemic. Meanwhile,more Americans than at any other time in history reply upon foodstamps. And to make matters even more dire, it is only the decisionto print trillions of new dollar bills that is holding everything together.Just as America’s rock is about to hit its American bottom, you mustask “Do you believe in miracles”? And, the short answer is –
US Dollar Strength
Way back in November 2011, our Global Outlook “
” concluded “
when it comes to currencies it doesn’t matter how you look in isolation – it’s how you look when lined up next to your neighbour 
Chart 1: Canary in the US coal mine
March 2013 Do you believe in miracles?
$ 45 trillionand growing
Source: IceCap Asset Management Limited, www.justfacts.com
GDP Unfunded Liabilities
USA - Nominal GDP vs Net Unfunded Liabilities

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