violence has once again flared up. these are the images the world has been seeing from the streets of canada. showing up for asians room today. this is all too thanks for choosing this for your news our top stories tonight in syria is all position now being called on to stop the violence as president assad signs up to the peace plan but it's through the factions that. five of the world's fastest growing economies are hammering out an alternative to the dominance of the i.m.f. the world by as they meet in india. i britons at a petrol panic with fuel stations running dry as motorists over a potential thank you driver strike no industrial action. now

d.c. studios it's nice capital account. good afternoon and welcome to capital account i'm lauren lyster here in washington d.c. these are your headlines for march twenty seventh two thousand and twelve ben bernanke is on class number three of his p.r. offensive today defending the fed's response to the financial crisis like the federal takeover of fannie mae and freddie mac. . that protected those investors that had to be done or else it would be. your misinterpretation of the crisis meanwhile timothy geithner pushed for more money funneling through multilevel institutions that fund bailouts and other agenda items. these institutions of course. are broad american strategy to protect our national security interests. now if you're just sick of listening to

all of the us is all over our social and national problems good because today will focus on how to behave yourselves and the economic alliance of brics nations brazil russia india china south africa they're holding their summit this week on top of proposals for a development bank also ways to trade and lend each other's currencies now we'll talk to investor chris mayer who is out with a new book where he argues the narrowing of the gap between the emerging markets and developed economies will be the most important long term investment pain of the twenty first century give us details meanwhile the former i.m.f. president is charged with aggravated pimping the united states world bank nominee is under fire for not wanting to pick out the developing world will discuss let's get to today's capital account.

ok today we thought that we should take a break from our usual fare of fraud corruption and too big to fail model like domination to talk about some opportunity because as we've discussed on this show regularly we know in the u.s. we can't save that interest rates are repressive and are just crushing savers who are losing money home values continue to decline prices fell for the fifth month in a row in january to the lowest level since early two thousand and three you can see in there we got those numbers today from s. and p's case shiller index and i was talking to a very smart source and we were discussing ok you know if the bad guys have won and there's nothing we can do about it we can keep fighting it we can fight for the right thing but they're winning how do we protect ourselves what do we do well we know the economic trends ok the growth of emerging markets now represent close to

fifty percent of global economic output you can see right there the red or pink are emerging markets and the blue are the developed economies and we talk about that on this show often in more macro economic and political terms what that should mean for the world bank leadership for example or what it means for the dollar as the reserve currency but our guess thesis is that the narrowing of the gaps between the western world and everyone else will continue for decades and this will be the most important long term investment being of the twenty first century now he has traveled to war old getting all of the intel enjoying all the due diligence for us that supports us these that these put them all into his new book i have it right here it's the world right side up investing across six nations the author chris mayer joins us now thank you we are so excited to pick your brain about this i was saying before we started that you're probably everyone's top invite for their

dinner parties or whatever to take all this knowledge out of you let's just start with kind of the thesis of the book before we get to investing because you point out where is the u.s. used to be dominant in terms of global production. that gap between the u.s. and everybody else has really been narrowing since then and the what they're trying to get twenty first century and aside from the investment you call this the world right side up and you don't think it's a bad thing you don't think it you think it's a good thing you think this is how it ought to be why is that right and this process is taking over taken place over a long period of time and probably peak sometime in the one nine hundred fifty s. which remarkable to think that in the one nine hundred fifty s. the u.s. alone represented half of the world's manufacturing output and the us in western europe ninety percent of the world's manufacturing output so we've come a long way since then and that is really an anomaly when you look at a longer period of time human history china and india were large economies and there was much more of an equality between them so i think that's the world we're

moving moving toward doing creates a lot of exciting investment opportunities because i heard you point out in the beginning while the problems were having a lot of problems in emerging markets they don't have they have younger population they don't have the issues we do and there's a lot of work to be done yeah so let's talk about some of them ok let's talk about percival some of the other changes besides g.d.p. because one you point to is liquidity you said it used to be that the amount of shares traded in i.b.m. on one day in new york were more than all the shares traded on a day in shanghai or bombay so how is that changed and why is that an important indicator what is an indicator well i think it's an indicator that the merging market companies have gotten a lot bigger and used to be even their only maybe ten companies that had a billion dollars in sales and now there's something like fifty of them more so you are investing man you've just gone up tremendously you can reasonably buy. brazilian companies on the new york stock exchange you can buy russian oil you can

buy companies and operate in china so that reflects what's taking place on the ground you have more people with more money in their pocket they are. driving cars every emerging market i go to. cars instead of bicycles they're living in homes in the city instead of farms they're eating meat vegetables instead of cereals and grains and so all those ideas point investment trends from all those parts of pryor's to farmland. and i want to get into farmland in a little bit because that's something we hear a lot about first i want to look at kind of how we got here and kind of some of the trends between looking at the developed world against the developing world you point out your colleague an editor at the daily reckoning eric sprott i when he was giving the example did at one point c.d.s. on triple a rated. was higher than that which was rated below that and not only that but higher then brazil. colombia and death it was all one notch above junk and then if you look at you have this in your book to the how latin american stock

exchange has performed some of the stock markets in latin america versus some western european stock markets so what is the market telling us and all these trends market is telling us that these countries have some people that we all want a lot of these countries that resource rich so they've been right in the commodity boom again i can't emphasize things like population being young and they don't have a lot of the debt problems we do in these countries and governments are also moving more towards open markets making it easier to for foreigners to invest and so those things are starting to pay off now that's one question you touched on debt is that really at the end of the day what a trend like this that we're seeing is all about the western world is totally indebted now and developing countries have kind of gone through their crises they've had the shock therapy or the i.m.f. loans or whatever and they've paid them and they've learned now they don't have high debt loads and they have savings and not supporting reserves is that part of this think that's part of it and you know again we see that when it comes to

consumers in emerging markets they're spending a lot more of their income on things like food they're spending more on just basic things getting dishwasher or for. so they're in a position where their growth curve is going like this they're going to be spending a lot more money going forward u.s. consumers more and retrenching mode trying to save more money and pay down debt it's you know it's interesting i've been i haven't done nearly as much traveling as you but when i did report in brazil and vallas they have. microwaves so they have appliances even though they have literally just gotten running water but that's beside the point you were talking about farming and let's talk about that is that something that we often hear i want to bring up another chart from your book this shows how western canadian farmland performs during the seventies versus the s. and p. and money market fund now the seventy's were a period of high inflation and there are concerns among

a certain camp of people that that's something that the united states could be facing and then we're headed for and it's high inflation do you think that arable land is a place first and foremost on the debasement of paper money i'd say it's a combination of both things it's hard to talk about farmland to generally because in some parts of the world pharma is expensive and some parts of the cheaper u.s. farmland example i don't think is a particularly good investment right now the western canadian farmland is cheap relative to the provinces around it and she compared to the u.s. and that's two fold like you say some of it is it's going to be because currency has been debased as a real tangible asset hold its value and part of it is because we have this global shift and many millions of more people joining the middle class and spending more of their income on things like meat and fruits and vegetables which are much more green intensive and so we see a lot of that. but we're running out of it because i want to bring up another try to show how the supply has declined per person of arable land over the years over

the decades really how much of this is supply versus demand with some good balance is another good point man is. we've done a lot more with an acre of our my now than we could do forty years ago but you look at some of those games are starting to are starting to slow and so as we continue to spend cities we have certification we have water pollution problems to deal with and for valuable farmland is definitely or i should say pristine farmland is a valuable commodity in a lot of these emerging markets where you can get are we talking about an emerging market that's not really what this catch one sort of is because it has only been open to foreign investment i would say certainly within the last decade or so all those sort of close the markets ok yeah definitely farmland places like colombia even i mentioned in the book is a market that rock is virtually untapped in farmer and a lot of. land there that because of the drug lords before that was sort of closed

and so there's a. ring that acreage on line and you talk about i guess kind of what side of this which is that with emerging markets growing in their consumption for me and other things that require grain growing the natural question how do we need to worry about food shortages not just in the developing world but in the developed world i think it developed world we don't we don't have to worry about food shortages because we're the ones we have money that will hurt them or that it will hurt i don't know is that a body that will hurt the people who are living. more week to week but i think there's a lot of interesting innovations going on with farm land so there's these again come back to some of the investment trends there's. irrigation a new way new seeds in fertilizers and things we can use so i don't think we'll have a problem producing the ultimately but it's going to take time it's going to take investment to get there and when we when we do have disruptions. then we could have

serious situations in emerging markets i mean some ways food is what helped the arab spring. certainly doesn't have a lot of people showed up ok ok what about property rights because you're talking about farmland in places. like colombia and such a one canada. how much does this play a role in people's decision to own land and invest in places because even we've seen in the developed world in the west m.f. global they show that your money is not necessarily state right and that's a very big issue abroad too i know i was in brazil. for my own project there and that basically when the brazilian government came out and started putting restrictions on foreign investors so that's an example where you have a lot of land and big opportunity there but because of property rights questions and difficulties of actually getting the land it's not so easy and that is what's sort of frozen a lot of land in many different markets so that certainly that's a big big issue when you're talking about farmers probably right ok what about just

in your travels overall when you've gone to i mean you mentioned nicaragua in your book you mentioned to dubai which i want to get into a little bit later after we get back from break you know all these are from places where you see the best opportunities for somebody that wants their money's safe they want to know that they can invest and they can retire with their family and they don't have to worry about m.f. global or their farming confiscated or whatever what do you see as kind of those golden opportunity well that's difficult there are a lot there are a lot of different markets but one thing that you learn when you start to dig into these markets is that there are surprises nicaragua for example is a country that is actually pretty favorable for investors and there are there's a development on that by publishers a part of. for example and that's in the pacific coast titles really clearly there and it's a beautiful beautiful place your property rights are very secure so that's something that i think most people would not appreciate just thinking nicaragua in general but it turns out it's a really good place to retire and put some money you know new nicaragua there you

go we're going to go to break but when we come back i want to talk to you more about some of these other places and also some of these developments on more of the political level and how they affect investment. we will be back with more shortly with chris mayer is author of the world right side up and still ahead i don't know what you've heard about dominic strauss kahn but the french got some dollars out of him in the form of bale we'll give you our three cents on the alleged p.i.m. peak but first for closing market numbers. culture is that so much money and which of course you want to leave you with the rifles on my wall street protesters are coming out of their winter hibernation with

plans to renew demonstrations six months. welcome back so before the break we were talking about some of the great opportunities for investors that maybe you don't know about we're taking a break from some of the doom and gloom analysis and some of our economic problems to have a little bit of a glimmer of hope with our guests here but first when we come back i want to talk about some of the national issues that actually are creating some economic

opportunities elsewhere so let's bring in chris mayer back he's the author of world right side up his brand new book which gives lots of great examples and we're picking his brain for some of them so one of the really interesting things that you talk about in your book is the impact of nine eleven on investment you talk about how arab countries are producing countries before nine eleven they were investing twenty five billion dollars a year in the west and if that went down to one point two billion when they felt that their money needy wasn't welcome here a day they felt uncomfortable whatever but that well started flowing back to their countries and you say that that economic benefit is still being felt today and you talk about dubai could you talk about that because i think it speaks to a little bit of a broader theme that for example people bring up a lot when i talk about m.f. global or other things which is that people maybe are no longer willing to pay a premium for feeling like their money is safe in the u.s. and instead that money is going elsewhere do you see that as an example of a good example i think in simplest terms what happened in the guys that made it

very easy to invest money there. are a lot of regulatory structures there so all that money flowed into. and even now they had that real estate bubble but still i think the guy has a place it's a place for the rich in the middle east put their money it's kind of like they're switching one of their old switches and that's the old what was one thing i think is interesting you talk about visiting dubai before the bust and after the bust and you kind of had a different short term lesson versus the long term lesson what kind of a. the difference well in this you know i was there in a big in two thousand and seven when they were going through their peak and something like more than half of the cranes in the world were there and places buzzed with excitement and construction a second time in one week after the blast in two thousand and nine and now i think there's opportunity there i have a friend who lives there and bill is there are cheaper real estate prices down but

its role in the financial capital the middle east oil spills and that's something that i thought was interesting reading you were saying short term yes it's a lot and you know kind of these short term things you can see but long term with the same trend which is that the developing world continue to catch up big picture with the western world right and that's true for a lot of these markets i mean i expect they'll be big ups and downs in all these different markets but the one. across them all is this one going to turn longer term trends it's closing the gap with the western countries as your rogers would say you know china is the largest creditor nation in the world u.s. is the largest debtor nation in the world yes china is going to have ups and downs but so did the u.s. and i'd rather be with the biggest creditor thinking of china you talk about commodities and how commodities have been going up in recent years everything from our protocol and it's getting harder to find their deposits of this stuff and you talk about how china kind of on to this and we've covered that before how they are acquiring resources and commodities from from different countries different places

what should i take away from that what should our viewers take away from that oh if you take away from that if you invest in any sort of commodities like iron or a china that consumes half of the world's iron ore and half the world man huge chunks of oil in copper so if you're investing in any of those things you have to pay attention to what's going on in china and so short term i'd be a little worried because i think china is going to do it it's slow down now but longer term if you can stomach the volatility i think it should be pretty well because. as as countries move to more of the industrial there is a move more into city tennessee commodity consumption rises to meet their long. ok and i want to know how government intervention that kind of all of these things both in developed and developing economies you see western central banks printing even just a story out today showed that maybe the fed has been monetizing some of europe's debt has some european sovereign debt on its balance sheet and on the flip side you have brics countries that are getting together talking about lending in their own

currencies trading in their brain and be making their own development banks how does that factor into these investments yeah i think that's important you want to get a feel for where the trend is and a lot of these markets overseas are going more towards open markets more towards. currencies and things like that so the trend is good whereas i think in the u.s. you need your image going the other way getting less going less towards more close markets and more regulation and so that's where the real you know look at the before we go should i be worried about the dollar when we look at that trend yes you should be and i think you should diversify your political risk i mean you will also tell me often i hear well investing overseas is risky well i think it's risky if leaving all your eggs in one basket so i think you want to diversify their exposure and their point thank you nice notes and on that was chris mayer he's author of this book world right side up and you can read it to get more details

into the things we're just talking about thanks chris thank you. all right let's wrap this up with loose change i've got dimitri and shannon to talk about this last friday president obama met the deadline for appointing his nominee to head of the world bank. i believe that nobody is more qualified to carry out the mission then dr jim kim. ok dr jim cam mr president not everyone seems to agree with seems jim camus coming under fire for a book he coauthored criticizing neo liberalism and corporate led economic growth

that's according to the financial times ken argues in the book that dying for growth that's the name of the book that in many cases those policies made the middle class and the poor in developing countries worse off my question to you i am phrase sure that this is a good thing then you have someone buying for the top spot of the world bank who is likely to have it that is critical of neoliberal policies that have really hurt a lot of developing countries because of their causes but if it multinational corporations and big banks that basically go into developing economies and rates them and then give them loans time first loans then rate them again but does that show how backwards the establishment is that he's coming under fire for this as someone who is something that a little knock on the few points for leading the world bank what does that say about the world bank's priorities right glowing red flag about all the criticism that's gotten over there is no surprise there. so. this is this is this is this is

the model works you covered all the time i'm not shocked at all i mean this is where you'd expect you'd expect this from the world but. from the financial press this is the this is the most growth model like the idea that the this is not supposed to promote the entrepreneur and the independent investor they promote oh i don't promote the fair development of poor and i'm sure they get screwed over i mean they would benefit if they had if you actually had independent people going in all these large corporations that are basically pumping and dumping their economy yeah and you can see the p.r. campaign starting out because people are saying oh he's just too into health care he doesn't understand the importance of economic growth you know maybe dr can just understand the difference between good economic growth and bad economic and economic growth that benefits multinational corporations at the expense of people in these countries and the kind that actually causes development within these countries i like dr king more and more every day shannon if you want to. i have kind of a conspiracy theory about this i think this might be

a smear campaign by nigeria and colombia there are people who are trying to contest that position no no this is if this is going to be a conspiracy theory thing and you know who would be behind this mayor campaign larry summers ok that would be my bet. you're going to everybody together let's move on because from possible world bank president to a former i.m.f. chief and earlier i called him the former i.m.f. president i think the head of the i.m.f. it's called the managing director so i'm sorry i think i got that wrong please forgive me i hope you will buy this story because dominique strauss kahn of course we have heard so much about him over the last year or so he's been put under a preliminary investigation for his alleged involvement in a french prostitution ring what are his charges aggravated him being so you look. what exactly is this charge aggravated pimping what does that mean exactly and how common

a charge is this well. known not only having an affair with a prostitute but it being untrue. ok what we call prostitution. so you were arrested but he was ordered to pay thirty three thousand dollars bail little better treatment you've got then he's gone in the us and prostitution is legal in france i said but pimping is not to indict him prosecutors would have to prove that he played an organizational role in the prostitution ring all i can say is when you get used to screwing over developing countries at the head of the iron man maybe you're just addicted to the room there was no i mean this is a great eye it was bad loans and i know it's a great metaphor for the i.m.f. what they do very go around. the building nations are basically pimping out these these small countries and giving them give them over to multinational corporations

and banks who just turn them and burn them every day ok so it's not supposed that you've got basically a guy you know women with little pimping our country can you want to and he thinks i do want to get this last story great don't go ahead all right let's switch gears to something more light hearted kind of so the wine and spirits exhibition in the video is really one is going on in italy right now and it seems kind of electorate isn't the only one who likes the line. just as. kate is missing with some. nice. so guys we only have a few seconds but italy's wine industry is flourishing despite the recession booming exports in foreign markets domestic competitive pricing are they just are getting wasted because they're stressed out about their economy was a question that sort of voice industry recession proof just like gambling and i heard that actually work was rated for goldman sachs. that's what he did really view on that no no i think the story said that american consumption of italian

wines is quite strong i don't know what that says read the tea leaves for yourself because that's all we have time for thanks for tuning in go to our website joe and exclusive is there now that's you tube dot com slash capital account from everyone here thanks for watching have a great night. m m

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