Last week during the AFG conference, which we have mentioned several times in our latest posts, Victor Canto spoke during a lunch session to our group of institutional investors. Dr. Canto, current chair of La Jolla Economics and author of multiple economic books, mentioned several items worthy of further review, which I have summarized below.
- United States is 50% of the value of the world capital markets, yet only produces 25% of the worlds GDP.
- China’s growth is so fast, they must build one city the size of New York City every year.
- During the Reagan years the US carried many faltering countries on it’s back to prosperity, the US may not be the Sherpa of the next few years.
- As money supply increases and credit begins to move, Inflation is very possible.
- Chairman Bernanke will not allow deflation.
- United States is the currency of safety, most recently, shooting the value of the dollar unsustainably higher due to international concerns.
- Russia and the United States are the only mature countries where tax cheating is a criminal activity, i.e. Many foreign accounting records may not be 100% accurate.
- Pending tax changes will lead to structural moves that will minimize dividends and lead to greater buying and selling of public, and private companies, and assets.
- As the standard of living increases across developing countries, jealousy occurs and civil rights activists often lead to unrest, which may result in larger major country relationship stress.
While this list may seem to cover a wide spectrum of topics, I have mentioned the high points of several very detailed discussions. In our opinion, we find Victor’s talk of inflation, the US’s continued currency strength, and possible future country relationship stress of great interest.
Just a few updated thoughts after a successful day at the beach yesterday!
JK