Mr. Emerging Markets Is Bullish on the US

Monday, 22 Apr 2013 08:46 AM

By Dan Weil

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Antoine van Agtmael, the investment pro who came up with the term "emerging markets" and aided in creating the first funds to invest in those markets, has found a new darling — the United States.

Van Agtmael, 68, has been immersed in emerging markets for 42 years, Jason Zweig of The Wall Street Journal reports.

The United States is at the beginning of an industrial revitalization, according to van Agtmael.

Editor's Note:
 
'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.

“When he visited China last year, one manufacturing executive after another complained to him about American competition, ‘something I had never heard in 40 years in Asia,’ he says,” according to Zweig.

Van Agtmael notes several advantages the United States carries over China. For instance, Chinese labor costs are rising about 15 percent in the year, while they’re flattening in the United States.

In addition, the United States is producing copious amounts of cheap oil and natural gas from shale, and China trails the United States in cellphone infrastructure, three-dimensional printing and the use of robots in factories, van Agtmael says.

“U.S. manufacturing is becoming more competitive than you would think, and China’s less,” he notes, according to Zweig. “And the idea that manufacturing is old-fashioned is itself old-fashioned.

“A decade ago, nine out of 10 companies would tell you they were thinking about building their next plant in China,” van Agtmael explains. “Today it’s more like three out of 10, and maybe five out of that 10, say they want to build in the U.S.”

Investors don’t quite understand just how strong the United States is at this point, van Agtmael says.

“When I first started talking about emerging markets 30 years ago, people knew it made sense but they didn’t quite believe it,” he adds. “This is the same kind of thing: They get the message on one level, but they haven’t yet rationally absorbed it, and it hasn’t changed their behavior yet.”

He isn’t the only investment luminary who’s bullish on America. Berkshire Hathaway CEO Warren Buffett is also. “The world is uncertain. Stock prices are uncertain. The future of America is not uncertain,” he told The Buffalo News last month.

“We have a system that unleashes potential, and it’s just starting. It’s just galloping. And 535 people in Washington [Congress] can’t screw up 350 million people [working] for their own self-interests.”

Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.

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