Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Look up keyword
Like this
1Activity
0 of .
Results for:
No results containing your search query
P. 1
IceCap Global Market Outlook June 2014

IceCap Global Market Outlook June 2014

Ratings: (0)|Views: 91|Likes:
Published by CanadianValue
IceCap Global Market Outlook June 2014
IceCap Global Market Outlook June 2014

More info:

Published by: CanadianValue on Jun 30, 2014
Copyright:Traditional Copyright: All rights reserved

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

02/03/2015

pdf

text

original

 
Our view on global investment markets:
 June 2014 – Is Earth round or flat?
Keith Dicker, CFA Chief Investment Officer keithdicker@IceCapAssetManagement.com www.IceCapAssetManagement.com 
 
1
The Global Hunt for Taxes
Back in his day, Christopher Columbus was known as a swashbuckling adventurer willing to risk his life and limb for a boat ride. His thirst for adventure discovered many things, including the fact that the earth is round, and not flat. Then in 2005, American journalist Robert Friedman declared the opposite in that the world isn’t actually round, but flat as a pancake. His best selling book explored how technology was changing the way people, businesses and countries do business. Yet today, a mere 9 years later, legions of financial analysts, economists, elected and unelected officials are declaring the world is neither flat nor round, but a bunch of individually, wrapped islands completely separate, independent and unaffected by anything outside of their respective borders. Call us old fashion, but we lie squarely on the side of Christopher Columbus. Yes, the world is indeed round and what goes around, comes around so to speak. Financially speaking, it’s our view that it is impossible today for any major country to function independently from anyone else. Economically, if most countries are doing well then it is highly likely any laggards will be dragged along for the ride too. Of course, the opposite is also true. If the majority of the big economic countries are not doing well, then it is highly likely the rest will follow them down the garden path.
What goes around, comes around
June 2014 Is Earth round or flat?
 
www.IceCapAssetManagement.com Today, most major countries are struggling. In Europe for example, recent GDP data shows the old world growing at +0.8%. Hardly the acceleration needed to declare victory over the debt crisis. Italy in particular, is really struggling with what now looks like another return to recession, while everyone’s favourite socialist country – France, also disappointed with no growth to speak of at all. Meanwhile, emerging market countries – the darlings of the pre-2008 crisis continue to grow, but at half the rate of what they regularly achieved previously during their boom years. There is some good news. The United Kingdom has now officially returned to the same level it was prior to the 2008 crisis. And then there is America – the self proclaimed economic engine of the world. At first glance, America seems to be firing on all cylinders. Over the last 4 years, the country has averaged +2.4% growth. Measured another way, the American economy increased from $13.8 Trillion to $15.6 Trillion, for a total 4 year gain of $1.8 Trillion. At second glance, during the exact same time frame the US Federal Reserve printed money totalling $3.3 trillion. While viewing the data in
Chart 1
 on the next page, we ask you to really think about what you are seeing. Essentially, using a money printing machine to produce $3.3 Trillion only helped to grow the US economy by $1.8 trillion.
 
Chart 1: USA increase in GDP vs Money Printing 2010-2013
$- $500,000,000,000 $1,000,000,000,000 $1,500,000,000,000 $2,000,000,000,000 $2,500,000,000,000 $3,000,000,000,000 $3,500,000,000,000
Total Money Printed GDP Increase
 
$1.8 Trillion $3.3 Trillion
Source: US Federal Reserve, World Bank
June 2014 Is Earth round or flat?
 

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->