They Are Not Telling You The Truth About This… – Lyn Alden #Finance

you can ironically turn a very safe investment into an unsafe one by overpaying for it an example that I point to everybody’s talking about Nvidia or the big Tech um but I point to Costco Costco is trading at 55 times earnings uh currently despite being a 40 some year old you know you

know retailer um and Costco is a wonderful company it’s one of the few companies that is liked by shareholders employees and customers uh I expect Costco to be doing amazing five or 10 years from now but I would never pay 55 times earnings for Costco you know it’s hard to invest

it’s hard to operate a business when real rates are so high um but as that comes down um and they’re able to do it without kind of killing their currency because the US is cutting alongside them when the Federal Reserve begins to lower rates it’s usually trying to give the US

economy a boost lower rates make borrowing cheaper which can stimulate spending and investment but here’s the kicker lower rates also mean lower Returns on Investments like us Bonds so what do investors do they start looking for better returns elsewhere often

in global Markets historically and from the views aired by Lynn Alden in a podcast with Anthony FAS we’ve seen this play out in interesting ways for example in the podcast Lynn talks

about the early 2000s after the dotom bubble burst the FED cut rates and the United States saw a wave of investment moving into emerging Markets in Asia and Latin America these regions

offered higher growth and better returns making them attractive spots for us Capital Lynn discusses the 2008 financial crisis when investors moved Capital to countries like Brazil India and China offering higher Yields she believes If the Fed Cuts

rates today money will flow based on the strength of other economies like Europe or Asia with higher growth or Interest Rates attracting US Capital geopolitical factors such as trade tensions and political stability are also key Lynn notes that the reason behind

rate Cuts matters if it’s due to US economic trouble more Capital May shift abroad while preventive Cuts might have a smaller impact so what does all this mean for you understanding these Trends can help you make smarter investment decisions especially in a globalized market

watch clips from the interview for further insights into ly alden’s conversation with Anthony fatsis please like this CashNews.co subscribe to the channel and turn on post notifications for more content enjoy the CashNews.co so I’m looking at a lot of the countries I would consider like

mid midst strength so there’s some that are really strong like India that don’t have a lot of dollar Diamond Debt and they’ve been already doing quite well and they’re quite expensive um so around the margins this Capital rotation is

probably not going to benefit them that much because they’ve not really been harmed by the prior cycle um whereas the brazils of the world the colombias of the world the malaysias and indonesias of the world um that that kind of mid level of strength where they have Dollar dominant

Debts but they also have decent reserves and they’ve been able to hold hang in there um in against a strong dollar um you know they’ve had so many headwinds that now if they finally do get a Tailwind they they’re kind of like cold springs that are ready to pop up

um then you look further down the risk Spectrum toward Frontier Markets like Egypt for example Egypt has a a pretty pretty significant currency crisis a pretty significant balance of payments

problem um if you do get a weaker dollar Markets like that could have a really big jump but I’d be more concerned around the sustainability of that jump because they’re just more

structurally impaired so for me I like that midlevel um China is kind of on its own right now because it’s not it’s not doesn’t have much dollar dominated Debt for its GDP instead it’s mostly a question of Chinese Economic Policy which is to say you know

they can they can inflate their way out of their current malays anytime they want to kind of like the us did during during and after covid the question is do they want to or not so as long as they’re kind of playing it more conservative we probably should expect a malaise in China for a while

um but whenever it the the winds change there um they they have a lot of fiscal tools they can do to really kind of pump things up um and they could shift from you know housing driving a lot of their um growth to to more other types of consumption the offshoring uh and automation of the past 40

years was a very powerful disInflationary force right so instead of Americans in like Detroit making cars uh you know you offset that to Japan which at the time you know especially back then was cheaper um and instead of making you know sneakers in the US you make them in in China

in Vietnam and Bangladesh and all that um and you automate it so you know you know one person can do the work of four people because it’s automated we’ve already automated a lot of blue collar work or or put it into cheaper labor bold; color: #1a73e8; text-decoration: none;">Markets um and basically what AI can do I think in the in the investable time Horizon so I’m not going to think 20 years from now for AI but let’s say the investable time Horizon of five to 10 years um it can start to chip away at White

Collar work it can it can you know one white collar employee can do the work of more because they have a bunch of AI assistants kind of um automating some of their repeated tasks um and kind of you know offsetting some of their analytics or their thinking or you know things like that um you know a

lawyer doing legal research having AI helper it makes things a lot you know more efficient so I think that we could see a similar phenomenon to White Collar labor as we saw to Blue Collar labor um I think robots robots are an energy intensive challenging thing right that’s I think

that’s robots in kind of the the natural world is a longer term thing but I think that that the automization like automation of White Collar work is is a low hanging fruit for now Lynn further discusses how a weakening dollar might impact Emerging

style="font-weight: bold; color: #1a73e8; text-decoration: none;">Markets she believes that while India is unlikely to benefit much due to its strong performance and low dollar Debt mid-tier countries like Brazil Colombia Malaysia and Indonesia are well positioned for growth

these nations which have faced pressure from a strong dollar could rebound strongly as the dollar weakens she also notes that Frontier Markets like Egypt might see a temporary boost but warns

about their long-term stability China operating on its economic cycle could turn things around if its government shifts policies but until then it may remain in a stagnation phase overall Lynn sees mid-tier Emerging text-decoration: none;">Markets as the most likely to benefit from current Global Financial shifts Lynn points out that while Automation and offshoring over the past 40 years significantly reduced costs and boosted productivity in blue collar

style="font-weight: bold; color: #1a73e8; text-decoration: none;">Industries the next wave of of automation is likely to impact White Collar jobs in the next 5 to 10 years AI could allow whitecolor workers to be more efficient by handling repetitive tasks and assisting with complex processes

like legal research let’s go back to the interview and watch more Clips to gain insights from ly Alden this whole period is probably going to be more energy intensive because the the the latest technical Trend over the past 15 years was toward social media and mobile internet which is not

particularly energy intensive you know um you know just it’s soft for apis it’s it’s fairly low bandwidth um it’s fairly low Hardware intensity and it offsets some real world things like you know you don’t really need to buy a printer scanner anymore if you can just

scan things on your phone and sign things online um so you’re actually offsetting some other things you fold like 30 different products into your phone and you use those other things less or not at all so it’s it’s kind of a displacement effect whereas if we start really building

up a lot of compute resources um that is more hardware and energy focused uh intense um and so I I do think that you know that there’s going to be pretty significant energy demands over the next five 10 15 years um and there’s going to be that’s an investment opportunity but

it’s also a risk because that’s a source of Inflation If energy Supply does not stay ahead and I think that’s a pretty big risk and in Europe’s case I mean you know at first glance negative energy prices sound like a good thing right it sounds like abundant

but Europe has higher average electricity price than most other places even though they also have a pretty high frequence of of um you know negative energy um basically you can think of negative energy pricing as inefficiency it’s it means you know you’re producing electricity precisely

when you don’t want it right so it’s not about how much electricity we produce it’s about producing electricity when and where we want it because we can’t just teleport it for free anywhere right so you know when when we wake up we all use a lot of electricity and then when

people like you know commute and go to work they might use less electricity at home and it’s those workplaces that are on and then in the evening they come back and use a lot more electricity again but really for them it’s more been like the economic power the the the they produce so

much electricity and then they use it to produce so many physical goods and then they have all the logistics all the shipping ports all the railways all the highways uh to you know kind of all the pieces coming together right so when we think of like in the US they think of restoring they think of

it as building Manufacturing facilities but it’s not just that it’s building it’s it’s it’s kind of redoing your whole electrical grid to be able to do that and then also there’s human Capital right so in the United States we’ve so

de-industrialized ourselves that you know we have good technicians but we don’t have enough good technicians right and it’s hard to you know you have to kind of PE people kind of learn over decades don’t go into manufacturing go into

style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance go into Healthcare uh and now when you need more people in in manufacturing that takes years to build up very experienced technicians in large numbers that kind of run these automated facilities and China on the other

hand has a tremendous amount of human Capital in you know Logistics and in manufacturing and that’s that’s not something you change in a year or two or three that’s a generational change so that the you know Europe’s got you know Europe’s got a lot of

human Capital um in that area but they’ve been hampered by their energy side and in the US we have the energy to some extent but we don’t really have the the human Capital that area anymore um and so that’s those are very long rotations higher

immigration for that moving forward but that’s has other challenges if if you get too high immigration obviously as we’re saying especially if you’re talking about very experienced technicians it’s different than just the number of people involved it’s people that have

been doing being a technician for five or 10 years right it’s that kind of buildup expertise um that you can imagine I mean you know China’s been this this like manufacturing Powerhouse for like 30 years um and they they’ve got very a large number of very experienced technicians

Lynn highlights that while recent Tech trends like social media and mobile internet have been energy efficient future advancements will likely demand much more energy stressing our Energy Systems in Europe negative energy prices show inefficiencies in handling supply and demand impacting industry

costs and pushing some manufacturing to Regions with more reliable energy meanwhile China has quickly ramped up its manufacturing especially in cars and its vast energy resources allow it to lead in global text-decoration: none;">Markets particularly in emerging economies digital Technologies are transforming societies by enhancing Global Communication access to information and opportunities for growth they’re improving areas like Health climate action and poverty reduction while driving

economic growth with new Markets and job opportunities however concerns about privacy data security and the digital divide persist addressing these issues is crucial to ensure that

technological benefits are shared widely ethical questions about the impact on jobs and personal rights also need careful consideration as we move forward as we come to a close how can we navigate the impact of federal rate Cuts Global color: #1a73e8; text-decoration: none;">Markets and technological advancements please drop your thoughts in the comments below share this CashNews.co and hit your thumbs on the like button thanks for watching don’t forget to subscribe for