Templeton Emerging Markets Investment Trust

sabretoothtigger

grey_gym_sock wrote: »

er .. it's only the richest country in the world! ... i.e. total wealth, not per person.

If we've talking about investment, then its productive wealth that matters. I know they have the most per person
If you take all the debt USA has they are the poorest nation to ever exist because nobody has ever been able to borrow so much against such little security.
ie. they dont do much with all that money that is useful or productive, anyone can procure money then spend it

Obviously its a big country and still great in parts Im not against them but the net effect is USA is not rich compared to productive exporting countries, they are actually poor, getting poorer and possibly soon unable to repay the debt.
Nobody in power is going to confirm that but we should agree its possibly true even if remote right now

To back emerging economies is largely about investing in production over the consumption or retail of that production

Glen_Clark

According to the FT today, buyers and sellers are waiting to see how much more money printing there will be.
'Asian Markets await Fed Meeting Outcome: The key event will be the conclusion of the Federal Reserve’s Open Market Committee meeting later in the day, which could offer fresh hints about when the US central bank might start scaling back its quantitative easing programme. Many in the markets expect this “tapering” to begin in September. The European Central Bank and the Bank of England will hold policy meetings on Thursday, while the US non-farm payrolls report for July will be released on Friday.

Glen_Clark

sabretoothtigger wrote: »

Because they have influence beyond their means. My shadow is 12 feet tall, Im a giant till I turn the corner and people realise.

I think its Britain that is the small fry alongside America and Europe. They will go their own way and when they have had enough of money printing interest rates will rise whether Britain likes it or not.

Glen_Clark

Just bought a few TEM shares for diversity as I didn't have any Emerging Market Funds.

sabretoothtigger

money printing interest rates will rise whether Britain likes it or not.

I agree, its not set for our liking. I think USA has more of a problem set up though and a greater reliance on deficit spending.
More of their debt is shorter term which must be rolled over, its the same deal as Greece faced where they run into a problem on the refi.

If we all kept our mortgages on 5 year terms instead of 25yr we'd have far more problems, I think this is what they face. Yes they can print but its not going to be 'free'.
It boils down to imports and lack of production, both of us have a problem if we cant borrow and emerging markets can at least use their production for themselves whatever happens to the west

IrnBruMan

I heard Dr Tobias speak a couple of months ago at an event for analysts and asset managers. I wrote a couple pieces on TEMIT including a review of the trust and added it to my buy list. This is on a long term horizon and with a recognition that I dont expect much to necessarily happen in the short term but that price was reflecting the disappointment with the asset class.
Also, timing markets is a skill not many of us posses. There is a lot of empirical evidence that buying when markets and expectations are low is a good long term strategy. Who is to say the emerging markets won't go lower from here but we can say they are low now.

One thing I remember him saying is that in only 2 out of the last 10 years has Emerging Markets under performed developed markets.

grey_gym_sock

sabretoothtigger wrote: »

If you take all the debt USA has they are the poorest nation to ever exist because nobody has ever been able to borrow so much against such little security.

the USA (and not only the USA) has, in JK Galbraith's words, "private affluence and public squalor".

the obvious way to square that is higher taxation.

if that proves politically impossible, then another way is (as you mention) for the government to default. which is likely to have all kinds of unpleasant side-effects.

US quoted companies represent a major part of the world's productive economy. far bigger than all quoted companies in emerging markets combined.

sabretoothtigger

Its not predictable how it will turn out. Coke earns more outside usa then inside and so on.

Taxation is not possible if its already true that rates are as high as 50% in some places.
Nevada has no income tax but how many live in the Nevada desert, tax is likely already too high for most and because large business are global it cant just be squeezed without it becoming a hostile and destructive process, ie businesses will move operations elsewhere

India has massive government interference also, but these places are lower cost generally. So much spare labour no min wage is ever feasible, China has falling population hence I avoid it plus they are especially tied to USA

grey_gym_sock

which tax rates are 50%? (i expect something somewhere is taxed at 50%, but profits generally are not taxed anything like that high.)

higher taxation (of corporate profits, or the very rich) in the USA is politically impossible because the ppl/corporations who would be taxed more have bought the politicians.

apart from that very real obstacle, it's not impossible at all. a few things might move to other countries, but most things can't move. because (for jobs) you have to go where the skills and infrastructure are available. and you could also tax based on where sales are made, which nobody who wants to sell to the huge market in the US can get out of. i'm not saying there isn't any threat to the wealth of the USA (and europe) from globalization, but it's a lot more subtle and gradual than is made out. it's used an an excuse by ppl/corporations who favour low tax rates.

sabretoothtigger

who would be taxed more have bought the politicians.

I dont see it that way, we can go into the whole rich people argument but USA is not binded to wealth. That money is global, Greece has rich people I bet but overall its not working

They dont pay more tax because they have no need to and its just not effective to try and force them
50% would be personal taxes in total. Companies are less, I see them as more portable then you

USA have the oil and gas, arable land and other positives, that is real wealth. Tax it, force seizure is even possible but otherwise they are likely to fail.
Big government is not productive or they would not be running a deficit when they have GDP growth. If they were to be surplus by 2014 we could give them that but any reasonable payback is nowhere in sight. The books are unbalanced

I think Dollar will not be the reserve currency, it will be a jarring change. If we compare it to the Euro, the economies tied to it are too different

jobs) you have to go where the skills and infrastructure are available. and you could also tax based on where sales are made

That would be the most important part of this thread. Alot changed, Singapore is richer then UK now. Alot of these countries matter more then us, they are better educated & have skills to make business.
Why wouldnt they be world leaders and we the second tier, what exists now reflects history more then the present

The tax on sales part relates to dollar strength which is really my argument, that this wealth is transiant. They have too many liabilities, large parts of their worth rely on other governments extending support.
If USA was a share it would be HMV I reckon, a great name fondly remembered but no longer actually half as useful or productive. Its the debt that owns that company not the share holders