EST. 1903 - Presenting global influential leaders from business, labour, education & government through events
Coxe, Donald; Manford, Michael; Gluskin, Ira
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A forecast for the global economy and global capital markets for the year. The speaker's forecast that this is going to be a different kind of world for the global economy and capital markets than we have been used to experiencing. Looking back at what gave us the era of inflation. The factor of the Cold War. A government that people believed in. A growing work force. A correlation between the growth of the work force and inflation. A growing money supply. The banking era where the banks loved to lend money. Growing union powers. Major commodity price rises in the seventies. The end of an era when the Cold War ended in 1989. The peak for the Japanese stock market which was the most inflationary at the time. Events in Canada and elsewhere. The technological breakthrough of the micro chip. Disinflation, and now outright deflation. What this means on a global basis. An era in which there will be two kinds of stores of value: long-term bonds of countries like Canada whose currencies have stopped being devalued, and companies that are truly global in their ability to either serve the current baby boomer and retirement class with wealth management, or are able to serve the consumer needs in the new emerging middle class all over the world. Gold no longer a store of value. The position of oil and gas stocks. Companies that are driving the world as it creates a new kind of environment.
The U.S. economy and what's really happening. An economy whose exports are growing at 5%; that has capital spending growing at 7 or 8%; where inventories are scarcer than ethics in Washington. The normal debt of America; lower interest payments than in 1989. Consumer spending and cash flow in the U.S. The speaker's forecast that the U.S. economy, contrary to the consensus forecast for this year, is going to probably grow in the area of 3%. An inflationary rate of growth for the U.S. economy. Wage growth of 4%. Such inflation bothering the bond market. What the Federal Government might do. Long-term bond deals in their bear phase. The true driving force behind North America: Canada. This year the payoff year for the Canadian economy, and how that is so. Growth of capital spending. The Canadian consumer. 1997 as the year of metamorphosis for the Canadian consumer. Real wages caught up to inflation. Lots of productivity. Employment growth picking up. Deflation in Canada. Looking for the Canadian dollar to rise up to the 130, 133 range. Prospects for foreign investment good. The final piece of the puzzle. The potential for Corporations to make money in Canada. A very profitable year for Canada.
Speaking as an investment manager. A recommendation to read Barrons to learn about the investment business. Who says there's to be deflation, who says there's to be inflation. The factor of the province of Quebec on the Canadian stock market. The Canadian economy in terrific shape. The recovery of the real estate economy. The problem with so many people buying mutual funds. What's wrong with the stock market. The people who manage Canadian mutual funds. Comments on mutual funds. What people are investing in. The inherent conservative nature of Canadians, and of the people who manage mutual funds. The speaker's hope for some speculation, and that the forecast here a year from now will say, wow, after that tremendous growth we've had in Canada, now you have to watch out. The positive situation for Canada.