A VIRTUAL WHO'S WHO
The good and the bad, the big dogs and the small, the thinkers and the doers among libertarians and on the "Right" – you can encounter them all in The Daily Bell's exclusive weekly interviews. Indispensable.
TRUTH AT WORK
There are very few publications out there that have the smarts and guts to tell the truth about the dictatorial forces at work destroying our civilization. Thankfully The Daily Bell is one of them, and it appears in the mailbox every day.
GREAT INVESTMENT INFORMATION
I love reading The Daily Bell! Interesting investment information, a political and social viewpoint that lets me know I'm not alone in the world and "annotated" with analysis. I highly recommend it to all interested readers.
For alternative views on contemporary politics, culture and science, from a libertarian point of view, check out The Daily Bell.
Sit down to read from The Daily Bell and experience a jolt of intellectual energy.
READ IT EVERY DAY
A defender of free markets, The Daily Bell takes a libertarian approach to expose and unravel this global misinformation campaign. Read The Daily Bell – every day!
GUTS, OBJECTIVITY, WISDOM
Rarely does a publication have the guts and objectivity to tell it like it is, yet the eloquence and wisdom to listen carefully to the ‘other side.’ This is The Daily Bell accomplishing its daily mission.
I really enjoy reading The Daily Bell for the excellent research and content provided on a wide variety of issues vital to the Freedom Movement.
PREMIER FREE-MARKET ANALYSIS
The Daily Bell rings out for liberty every day. It is the premier online source for insightful and hard-hitting free-market analysis and interpretation of economic, political and business events.
The Daily Bell features consistently solid analysis of and thoughtful challenges to contemporary statism. I am proud to be on the team.
INSIGHT YOU CANNOT IGNORE
The Daily Bell provides unique insights on contemporary political, economic and social problems that can be found in such a concentrated form nowhere else. Whether one agrees or disagrees with it, one cannot afford to ignore it.
The Daily Bell has a great libertarian point of view, and excellent economic analysis. Add it to your daily reading.
VOICE OF REASON
I have thoroughly enjoyed the analysis and interviews at The Daily Bell, which has so often been a voice of reason during these perilous times
SOURCES YOU CAN TRUST
The Daily Bell should be on everyone's shortlist of news sources you can trust. It's on mine, and we often refer to it in our own weekly news service at The Reality Zone.
I enjoy reading The Daily Bell because it often has refreshing and novel ways of looking at things.
A LEADING LIGHT
The future is created by the people who build it, not the people who predict it will not exist. You can meet lots of important builders by reading The Daily Bell.
GREAT JOB, DAILY BELL
I can say that, unlike the mainstream press, The Daily Bell knows the questions to ask and has the chutzpah to ask them. They realize that socialism and Keynesianism are wrecking the world and they are helping to save what is left of liberty and free markets.
SEPARATES WHEAT FROM CHAFF
The Daily Bell is a true beacon to lead in helping the reader to separate the wheat from the chaff.
AHEAD OF THE CURVE
The Daily Bell has come out of nowhere to introduce to the Internet community some of the most intriguing and proactive interviews there are out there. Let's hear it for creativity and being ahead of the curve.
CUTTING EDGE ANALYSIS
At a time when growing majorities worldwide are tuning out mainstream news, people are seeking the cutting edge, insightful and thought provoking analysis that The Daily Bell consistently provides.
PART OF MY DAILY NEWS DIET
I read it every day!
NEVER MISS AN ISSUE
I love the Daily Bell. Every issue is principled and informative.
THOUGHTFUL NEWS, EXCLUSIVE INTERVIEWS
I always read the Bell. The news items are thoughtfully selected, and the interviews are unavailable elsewhere.
Liberty is under assault by Big Government. The Daily Bell is an essential tool for information for those who want to fight for freedom.
THE DAILY BELL IS A MUST-READ
Because the world is changing so rapidly, it is difficult to keep up, which means The Daily Bell is a must read. I consider the information critically important reading.
Get outside the box with The Daily Bell and experience independent views.
ONE OF MY FAVORITE SITES
The Daily Bell is one of five sites that I review every day because I find there a clear, common-sense interpretation of everyday events.
I consider The Daily Bell essential reading for anyone desirous of understanding the way the world really works.
The Daily Bell does a remarkable job of exposing how money power uses central banking to crush people into submission via global government with economic and political slavery being the desired end result.
MESSAGES OF TRUTH
The Daily Bell website is one of the authentic voices cutting through the clouds of vapid opinion, the morass of mediocre media and the confusion of Orwellian doublespeak. The Bell website lives up to its name, ringing unheard messages of truth in our ears.
I read The Daily Bell every day and I find it very informative.
The Daily Bell is an indispensable source of news and information for those seeking to curtail the power of the welfare-warfare state.
The Daily Bell affords an excellent alternative perspective on some of the noise and nonsense of mainstream media. In particular, I enjoy reading Anthony Wile's 'free-market analysis' on current subjects and articles. Very insightful.
The Daily Bell is a fantastic source of challenging thought from a wide range of freedom loving people.
A MUST-READ FOR EVERYONE
The Daily Bell is a must-read for anyone who wants to understand the effects of the state on our economic future.
GREAT THINKERS YOU CAN'T GET ANYWHERE ELSE
The Daily Bell has revived that great old institution of the personal interview, extracting information from today's great thinkers you can't get anywhere else. Outstanding!
INFORMATIVE SOURCE OF INFORMATION
The Daily Bell is an informative source of information and commentary from leading figures in the liberty movement. It's a pleasure to be interviewed alongside far more notable individuals.
PROFOUND AND PROVOCATIVE
Every day, I rely on the Daily Bell for a different perspective you'll never find in the regular media. It's an analysis and timely insight that is profound and provocative.
There is no other publication in print or on the Internet like The Daily Bell. They have the courage to report the truth and analyze current foreign policy, politics and economic events in the context of a formerly hidden history of financial elites.
The Daily Bell is one of the most innovative and in-depth websites on the Internet. The breadth of the content is awe inspiring and the amount of knowledge imparted is almost impossible to quantify. For me, as a liberty minded seeker of knowledge, it is a must read.
OUT OF THE DARK
The Daily Bell leads us out of the dark tunnel of manipulated press into the light of free press.
Emerging Market Economies - A Structural Reduction of Portfolio Risk
December 13, 2012
Editorial By Frank Suess
Emerging market economies appear increasingly sound. This improvement, in part, can be attributed to commodity exports and wage advantages, which, in combination, have led to increased foreign currency reserves. Contrary to many of the 'developed economies,' emerging markets are generally not plagued with excessive debt and deficit issues. Ultimately, this reality reflects a lower structural risk and should be considered in the construction of one's investment portfolio.
In fact, increasingly, the structural stability of emerging markets has led us at BFI Wealth Management to re-classify emerging market asset classes. Although, as it is with any investment, differentiated and prudent care needs to be taken in your allocation decisions, emerging market investments are no longer classified as 'alternative' investments in our mindset. To the contrary, they are increasingly moving toward the core or our allocation model.
The purpose of this article is to point out some of the big picture trends that support this transition from the portfolio periphery to the core.
We consider the following seven trends as critical in this respect:
1. Demographic trends
2. Low public debt and deficits
3. GDP growth
4. Growth of foreign exchange reserves
5. Positive current account balances
6. Rise of domestic markets and disposable income
7. Emergence of robust central banks and institutions
Back to Normal
The world's economies and financial markets are changing in a big way. Today, for the first time since before the Industrial Revolution, the so-called "emerging markets" now contribute as much to the global economy as their so-called "developed" peers. It is to be expected that, with the usual ups-and-downs, this trend will continue for a long time to come.
The very simple reality is that, in some ways, we are moving back to the historic norm. Truthfully, the dominance of the developed, Western industrialized world was an anomaly in the grand context of human history.
For centuries China and India were the world's leading economies, at the center of global trade and innovation. Therefore, one might say that in essence the shift of economic power and wealth toward emerging markets represents a shift toward a world that is more in line with long-term history.
Irrespective of which time horizon you wish to apply to history, and irrespective of whether you like this trend or not, it is a reality that we need to consider in our investment choices and principles. And the change does create a wealth of opportunities for investors, in both the emerging and developed markets.
Where there is growth
In general, when one speaks of the allure of emerging markets, reference is primarily made to the level of GDP growth in such markets, or in other words, the growth of output in emerging market economies. This is partly a result of "globalization," the most prominent term of the '90s. It is also a result of the business cycle and demographic trends.
EM Share of Global GDP continues to grow
Source: IMF World Economic Outlook
According to IMF figures, the emerging economies' share of global GDP has grown from 21% to 36% over the past ten years. In consideration of the growth differential between emerging and developed economies, this is expected to continue as depicted in the figure above.
The effect of GDP growth, particularly when it is greater than that of competing economies, has led to a robust foreign exchange reserve accumulation. Over the past ten years, Asian central banks alone have accumulated more than US$ 3.5 trillion of foreign currency reserves, with China responsible for roughly US$ 2.5 trillion thereof. At the end of 2011, overall, emerging market foreign reserves stood at US$ 6.8 trillion. In comparison, developed countries only had US$ 3.4 trillion.
Furthermore, due to the competitive advantages regarding natural resource exports and labor costs, Asia in particular has benefitted from strong export growth, the result of which has also been substantial trade and current account surpluses.
In other emerging economic regions, for instance in Central and Eastern Europe and Latin America, current account balances have declined marginally. Some of this, especially in Latin America, relates to increasing domestic consumption, which is being fueled by emerging middle classes. Notably, the current account balances in emerging economies are significantly above that of the United States.
Growth of current account balances
It is interesting to note that future growth in emerging economies is expected to increasingly stem from domestic consumption. Domestic consumption is being driven by growing middle classes that have higher disposable incomes. The number of households with annual disposable income of $5,000-$15,000 has grown rapidly, particularly in China, India and Indonesia.
As middle classes gain the purchasing power necessary to increase consumption and improve their standards of living, emerging economies can be expected to increasingly transition from being dependent primarily on exports to developed countries to having more balanced growth, driven increasingly by domestic consumption and investment in local infrastructure.
Fiscal and Monetary Stability
Beyond growth, and possibly even more important, emerging economies have vastly improved their balance sheets and their systems of fiscal and monetary governance. This is particularly relevant in the context of the growing fiscal and monetary imbalances of most OECD countries. While America and Europe are slipping deeper and deeper into the morass of debt, emerging markets are not burdened by such problems.
Fiscal positions in many emerging market countries have been strengthened through robust local institutions. Sovereign Wealth Funds have accumulated large sums, received in part from the commodity boom, and are investing much of it locally. Private and public pension funds (such as the mandatory savings systems in several Latin American countries, including Chile and Colombia) also invest heavily in their home regions.
A significant amount of investment has been directed towards infrastructure projects. Also noteworthy are investments in local companies. These institutions have helped form a stable long-term local investor base, thus contributing to a potential reduction in capital market volatility in these countries.
Since the 1990s, many emerging market countries have restructured their sovereign debt and instituted fiscal reforms that have set them on a more stable course than was the case in prior decades. Inflation has declined dramatically as many central banks raised interest rates in the late 1990s to help tame inflation. Although the expansionary monetary policies of America, and now also of Europe, have led to imported inflation in emerging markets to some degree, inflation is generally in decline and no longer necessarily higher than in developed markets.
From our perspective and taking into consideration a combination of the factors discussed above, this has three investment implications:
First, emerging market sovereign debt issues can today generally be considered to be investment grade credits. Emerging market debt, as an asset class, no longer shows a strong correlation to non-investment grade corporate debt indices. On the contrary, a higher correlation to investment grade indices has been established. Therefore, hard currency emerging market debt is trading at a much lower risk premium versus high-yield.
Second, it is possible that this risk premium compression is secular, not cyclical. In other words, it may be a one-time transformation in the perceived "riskiness." Emerging market equities could be on the precipice of a similar one-time risk premium change. Such a scenario could provide a unique opportunity to overweight strategic asset allocations toward emerging market equities.
Third, to the extent that emerging market debt has morphed into more of an investment grade sovereign or duration risk-characterized investment, emerging market currencies may be in for a similar transformation. This would have positive implications for investors using these currencies more as a store of wealth, and it would represent the enhanced appeal of investing in emerging market debt in the form of local currency debt and corporate debt.