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Please note: The Frank Talk articles listed below contain historical material. The data provided was current at the time of publication. For current information regarding any of the funds mentioned in these presentations, please visit the appropriate fund performance page.

Get Ready for Commodity Liftoff: Global Manufacturing Just Made a HUGE Move!
November 9, 2015

Global PMI Just Crossed Above Its Three Month Moving Average

By most standards, October was an explosive month, with domestic equities recording their biggest monthly gains in four years.

But the most exciting news was that the global purchasing managers’ index (PMI) reading for the month of October rocketed up to 51.4, almost a point higher than September’s 50.7. Not only does this represent the strongest monthly surge in nearly two years, but the index shot above its three-month moving average for the first time since March.

As Donald Trump might say: This is going to be huge.

Global-Manufacturing-PMI-Crosses-Above-Its-Three-Month-Moving-Average
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We monitor the global PMI very closely because in the past it has reliably anticipated how commodity prices might behave in later months. Our own research shows that when a PMI “cross-above” occurs—that is, when the monthly reading crosses above the three-month moving average—it has signaled a possible spike in certain commodities, materials and energy. Three months following previous breakouts, copper had an 81 percent probabilty of rising approximately 7 percent, while crude oil jumped 7 percent three quarters of the time.

Commodities-And-Commodity-Stocks-Historically-Rose-Three-Months-After-PMI-Cross-Above-Cross-Below
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Indeed, oil prices have tended to track the global PMI pretty closely. With manufacturing exploding off the launch pad, could oil be very far behind?

Upturn-In-Global-Manufacturing-PMI-Could-Be-A-Tailwind-For-Crude-Oil
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What’s more, domestic equities are strongly correlated with global PMI readings. Investment research firm Cornerstone Macro shows that in five separate incidences since 2001, a PMI liftoff after hitting a bottom was soon followed by a rally in the S&P 500 Index.

A-Bottom-In-The-Global-PMI-Has-Marked-An-Inflection-Point-for-Domestic-Equities
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A similar trend can be observed in world equities. In the past, the MSCI World Index has rallied when the global PMI turned up.

The-Beginning-Of-An-Emerging-Market-Rally-Starts-With-An-Improvement-In-The-Global-PMI
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Brian Hicks, portfolio manager of our Global Resources Fund (PSPFX), agrees that the PMI reading is promising.

“It’s definitely constructive for commodities going forward,” he said.

One of our holdings in PSPFX, by the way, had a huge jump this week. British Columbia-based Sunridge Gold announced that it would be selling its 60 percent interest in the Asmara Mining Share Company, holder of the Asmara Project in northeastern Africa, to Sichuan Road & Bridge Mining Investment Development, a Chinese company, for $65 million. Sunridge jumped 41 percent this week alone and for the year is up 71 percent.

Did I mention that U.S. Global Investors is the largest holder of Sunridge stock (by a very wide margin)? That’s the power of active portfolio management.

So When Will Liftoff Occur?

As exciting as this news already is, we believe the real commodity liftoff should occur when the U.S., Europe, China and global PMIs all score above a 50.0, with the one-month readings above the three-month trends.

Of those regions, China is the only one whose reading still trails below the 50.0 level. For the month of October, it came in at 48.3, up from 47.2 in September.

But like the global PMI, the China PMI crossed above its three-month moving average, suggesting that manufacturing activity is contracting at a slower pace and preparing to reverse course into expansion mode.

It’s crucial that China’s PMI move above 50.0, as the Asian giant is the top driver of global commodities demand. We believe that once purchases, new orders and exports gain further momentum, commodities might have the fuel they need to skyrocket.

Heading Down Under

I’m nearing the end of my worldwide conference tour, which kicked off the week before last at the 2015 New Orleans Investment Conference.

Last week I was in beautiful Lima, Peru—the third-largest city in the Americas—where I attended and spoke at the Mining & Investment Latin America Summit.

Downtown-Lima-Peru

During this leg of the trip I managed to gain some tacit knowledge by visiting the Mineral MuseumAndrés del Castillo as well as downtown Lima, which is currently undergoing lots of construction and rapid population growth.

Frank-Holmes-Visiting-Mineral-Museum-Andres-Del-Castillo-Lima-Peru

Right now I’m in Melbourne, Australia, getting ready for the International Mining and Resources Conference. Stay tuned for my thoughts and insights on what I saw and heard during my travels!

 

Please consider carefully a fund’s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

Past performance does not guarantee future results.

This news release may include certain “forward-looking statements” including statements relating to revenues, expenses, and expectations regarding market conditions. These statements involve certain risks and uncertainties. There can be no assurance that such statements will prove accurate and actual results and future events could differ materially from those anticipated in such statements.

Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. Because the Global Resources Fund concentrates its investments in specific industries, the fund may be subject to greater risks and fluctuations than a portfolio representing a broader range of industries.

The J.P. Morgan Global Purchasing Manager’s Index is an indicator of the economic health of the global manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. MSCI World Index is a capitalization weighted index that monitors the performance of stocks from around the world.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. Holdings in the Global Resources Fund (PSPFX) as a percentage of net assets as of 9/30/2015: Sunridge Gold Corp. 1.59%, Sichuan Road & Bridge Mining Investment Development Corp. Ltd. 0.00%.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

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Have Commodities Reached an Inflection Point?
November 2, 2015

Iceberg, Nominal Interest Rates and Real Interest Rates

Last week the Federal Reserve announced it would delay the interest rate liftoff yet again, but while everyone seems concerned about nominal rates—the federal funds rate, in this case—real rates have already risen about 5 percent since August 2011. This “invisible” rate hike is much more impactful to commodity prices and emerging markets than a nominal rate hike, which is simply the “tip of the iceberg.”     

Since July 2014, the U.S. dollar has appreciated more than 20 percent. This has had huge implications for net commodity exporter countries, both developing and emerging, which typically see their currency rates fluctuate when prices turn volatile.

But why does this happen?

The main reason is that most commodities, including crude oil, metals and grains, are priced in U.S. dollars. They therefore share an inverse relationship. When the dollar weakens, prices tend to rise. And when it strengthens, prices fall, among other past ramifications, as you can see in the chart below courtesy of investment research firm Cornerstone Macro.

Dollar-Appreciation Spikes Almost Always Lead to International Currency Crises
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Indeed, commodities have collectively depreciated close to 40 percent since this time a year ago and are at their lowest point since March 2009. We might very well have reached an inflection point for commodities, which opens up investment opportunities.

Net Commodity Exporters under Pressure

The number of developing and emerging markets that are dependent on commodity exports has risen in recent years, from 88 five years ago to 94 today, according to the United Nations Conference on Trade and Development (UNCTAD). Many of these countries—located mostly in Latin America, Africa, the Middle East and Asia—have a dangerously high dependency on a small number of not only commodity exports but also trading partners.

For many suppliers, China is the leading buyer. But the Asian giant’s imports have been slowing as its economy transitions from manufacturing to services and housing, forcing many net commodity export countries to rethink their dependency on China.

China's Services Industry Surpasses 50 Percent GDP
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This is the position Indonesia finds itself in right now. As much as 50 percent of its total exports consists of crude oil, palm oil, copper, coal and rubber, all of which China has historically been a vital importer. A stunning 95 percent of Mongolia’s exports flow into its southern neighbor, according to the World Factbook. And for Chile, commodities represent close to 90 percent of total exports, about 25 percent of which goes to China.

But countries needn’t have such a high dependency on commodities for their currencies to be affected. The Australian dollar, for instance, has a positive correlation with iron ore prices.

Australian Dollar Tracks Iron Ore Prices
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About 98 percent of the world’s iron ore supply is used to make steel. So important is the metal to the state of Western Australia, where most of the continent’s deposits can be found, that every $1 decline in prices results in an estimated $49 million budget loss.

The same relationship exists between the Peruvian sol and copper. Peru is the fourth-largest copper producer in the world, preceded by Chile, China and the U.S.

The Peruvian Sol Tracks Copper Prices
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The Russian ruble, Canadian dollar and Colombian peso all follow crude oil prices. (Russia is the third-largest oil producer in the world; Canada, the fifth-largest; Colombia, the 19th-largest.)

Russian Ruble Tracks Oil Prices
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Canadian Dollar Tracks Oil Prices
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Colombian Peso tracks Oil Prices
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It’s important that we see stability in emerging market currencies, which would help support resources demand. We’ve seen some stabilization in the Chinese renminbi after it was depreciated in August, but a few others are down pretty significantly.

Currency Depreciations Against the U.S. Dollar for the 12-Month Period
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Global Manufacturing Could Reverse Course Sooner Than You Think

I’ve shown a number of times that commodity demand depends on manufacturing strength, as measured by the J.P. Morgan Global Purchasing Manager’s Index (PMI). This indicator has steadily been trending lower. Although the reading is still above the neutral 50.0 line, commodity prices have reacted negatively.

Commodities are Highly Correlated to Global PMIs
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Cornerstone Macro believes both the Chinese and global PMI are “likely” to rise in October, leading to a full year of upside potential. If true, this is indeed welcome news, but it’s worth remembering that the PMI looks ahead six months, meaning it’ll take approximately that long for commodities to recover.

In any case, now might be a good time for investors to consider getting back into commodities and natural resources since we could be in the early innings of an upturn.

“You want to buy commodity stocks when they’re out of favor, because they are cyclical,” Brian Hicks, portfolio manager of our Global Resources Fund (PSPFX), told The Energy Report last week. “If you look out 12, 18, 24 months from now, those equity values should reflect equilibrium commodity prices and move significantly higher from here.”

Conference Hopping

Last week I returned from the 2015 New Orleans Investment Conference, widely considered as the “World’s Greatest Investment Event,” where I participated in an investment panel and presented a speech. For 41 years, this event has attracted some of the world’s most distinguished speakers—from Margaret Thatcher to Steve Forbes to Dr. Ben Carson—and this year was no exception. Among the attendees were respected Fox News commentator Charles Krauthammer, “Gloom, Boom & Doom Report” publisher Dr. Marc Faber and James Rickards, author of “Currency Wars.”

This week I'm in Peru for the Mining & Investment Latin America Summit, and next week I’ll wrap things up in Melbourne, Australia, at the International Mining and Resources Conference.

The J.P. Morgan Global Purchasing Manager’s Index is an indicator of the economic health of the global manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

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Follow the Leaders: Learning from ETFs, BCA and the New PM
October 26, 2015

Reggie Browne, the Goldfather of ETFs, gave the opening remarks at the ETF conference in Austin.Last Thursday I had the pleasure of attending an intensive daylong ETF conference in Austin, just up the road from our office in San Antonio. Hosted by Cantor Fitzgerald, the conference was designed for institutional investors.

Welcoming the group was Reginald “Reggie” Browne, the “Godfather of ETFs,” who now serves as the senior managing director at Cantor Fitzgerald. His celebrity and prominence are nearly as big as his six-foot-five frame—and with good reason. Reggie has been instrumental in building the ETF landscape over the last decade and convincing investors of the power of the exchange-traded fund.

One of the panels featured chief investment officers from the Texas Teacher Retirement System (TRS). Jase Auby, Lee Partridge and Tom Tull discussed potential shifts in asset allocation under a rising interest rate environment, among other topics.

The TRS, one of the largest pension funds in the U.S., makes significant use of gold in its investment strategy, holding the yellow metal in many forms over the years. The same is true for the $20 billion University of Texas endowment fund.

Bruce Zimmerman, chief investment officer for UTIMCO, told CNBC in 2011 that the $20 billion endowment holds gold as a diversifier and hedge against currencies. This is precisely what we tell investors, and it’s validating to see such huge funds put it in practice.

During the ETF panel, I asked Jase, Lee, Tom and moderator Ronnie Jung about their thoughts on real interest rates and their relationship with gold. Everyone’s speculating on when the Federal Reserve will hike interest rates, but real interest rates, as I shared with you this week, appear to have already risen. (As a reminder, real interest rates are what you get when you deduct the monthly rate of inflation from the 10-year Treasury yield.) A 10 percent upswing in the U.S. dollar is equivalent to the federal funds rate being hiked 100 basis points.

This has had a huge effect on the yellow metal. When real rates are negative, gold has tended to do well. Conversely, when they’re positive—and rising, as they are now—it’s been a headwind for gold. This relationship was confirmed by the research of Barry Bannister, chief equity strategist for Stifel, who visited our office last week.

I also appreciated the TRS group’s bullishness on China. Their position is that, because everyone is negative on China right now, all sorts of investment opportunities open up from a contrarian point of view.

The World’s Second-Largest Economy in Flux

I’ve commented before that China has been moving away from a manufacturing-based economy and instead focusing more on services—financials, real estate, insurance, ecommerce and the like.

China's Services Industry Surpasses 50 Pecent GDP
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While the country’s purchasing managers’ index (PMI) reading has been in contraction mode since March of this year, these service industries are ever-expanding. The problem is that the transformation has not been fast enough to offset the massive size of the manufacturing sector.

But investment opportunities in this sector still exist. Anyone who’s traveled more than 100 miles inland knows that China is under-urbanized. Ever since Deng Xiaoping created special tax-free zones along the eastern Chinese coastline in 1978, most of the country’s growth has been concentrated in these few regions and municipalities. The interior provinces, on the other hand, have remained largely rural.

You can see this for yourself in the chart below, provided by Marko Papic, chief geopolitical strategist for BCA Research, who briefed our investments team this week. BCA is an influential, independent investment strategy firm with more than 65 years of experience conducting excellent macroeconomic research.

Chinese Interior Provinces Still Need Investment-Led Growth
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We just learned that the People’s Bank of China cut both lending and saving rates 0.25 percent, to 4.35 percent and 1.50 percent respectively. This will cause negative real rates in China to fall even lower, which is good for gold demand.

It will also likely add to the Fed’s list of doubts about raising its own rates. In a world where every other major country is stimulating its economy by cutting rates and devaluing its currency, it makes less and less sense for the U.S. to hike rates.

BCA’s Marko Papic stressed the need to see further stimulus in China. Without it, commodities and global growth in general are at risk. Some economists believe we might be headed for a global recession.

Difference of Opinion When It Comes to Defining Global Recession

Depending on who you ask, there are different ideas of what global recession looks like. The generally accepted one in the U.S. is two consecutive quarterly declines in real GDP. The International Monetary Fund (IMF), however, uses a different measure. Among other economic conditions, annual GDP must fall below 3 percent, a high benchmark and one that requires much stimulus.

Global growth for 2015 is at 3.3 percent, the IMF calculates, precariously close to the 3 percent threshold. 

BCA Research: The Trans-Pacific Partnership Is Needed to Fast-Track Global Growth

This is where the Trans-Pacific Partnership (TPP) comes into play, which is the stance BCA also takes. The landmark trade agreement, involving 12 nations, was signed earlier this month. Although it still requires ratification, the TPP could boost the world economy by an incredible $223 billion by 2025, according to the Peterson Institute for International Economics.

The 12 Apostles of the Historic Trans-Pacific Partnership
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Like Father, Like Son: Canada Elects a New Leader

I feel blessed to have had the chance to meet Prime Minister Pierre Trudeau in 1978. I'm second from the right.

One of the TPP’s biggest supporters was outgoing Canadian Prime Minister Stephen Harper. But the newly elected Justin Trudeau, member of the Liberal party, has also come out in support of free trade agreements. The hope is that he will continue to take this position where the TPP is concerned.

Although Trudeau earned his degree in education from the University of British Columbia and taught as a school teacher for many years, he is by no means a stranger to politics. He’s served as a Member of Parliament since 2008, and his father, Pierre Trudeau, served as Canada’s prime minister for 15 years.

Back in the 1970s, in fact, I campaigned for Pierre Trudeau alongside Dr. John Evans, a Rhodes Scholar. This was during Trudeau’s first stint in office, before being voted out in 1979 and then returning to serve again in 1984.

His son, only 43, ran on a campaign of hope and change—sound familiar?—and promised that, if elected, he would help the economy by increasing infrastructure spending. Unlike some other world leaders, he wants to put people to work instead of establishing a welfare state. Trudeau plans to raise revenue by taxing recreational marijuana—if he succeeds at legalizing it, that is.

Justin Trudeau boxes his way to center stage

One of the main criticisms of Trudeau the Younger is that he’s inexperienced politically. But here in the U.S., take a look at who’s currently topping the polls in the Republican field: business magnate Donald Trump, neurosurgeon Dr. Ben Carson and former Hewlett-Packard CEO Carly Fiorina. Accomplished though they are, none of them has been elected to office. This goes to show that voters have grown fed up with career politicians who lack accountability.

 

Next Stop, the Big Easy

Former Federal Reserve Chair Alan Greenspan one of the many distinguished speakers at the New Orleans Investment ConferenceThis week will kick off my short conference road trip, beginning with the 2015 New Orleans Investment Conference, happening October 28 – 31. For 41 years, this event has attracted some of the world’s most distinguished speakers—from Margaret Thatcher to Steve Forbes to Norman Schwarzkopf—and this year’s no exception. I look forward to speaking again this year alongside some of the brightest minds in the industry at what some call the “World’s Greatest Investment Event.”

After that, I’ll head to Peru for the Mining & Investment Latin America Summit, November 4 – 5, and wrap things up in Melbourne, Australia, at the International Mining and Resources Conference.

I hope you’ll join me!

The Purchasing Manager’s Index is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more of U.S. Global Investors Funds as of 9/30/2015: Hewlett-Packard Co. 0.00%.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

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China Then and Now, in Pictures
October 15, 2015

Beijing, China

It was in October 1993 when I first visited China to sniff out investment opportunities.

At the time, the Asian country was still going through an economic and existential transition that had been set off by the Tiananmen Square protests four years earlier. Along with the former Soviet Union, China had fallen out of the top 10 largest economies in the world.

How things have changed. I’ve since returned to China many times, and I’ve watched its economy grow to become the second-largest in the world. Based on purchasing power parity (PPP), it’s the largest. And according to Credit Suisse, the size of China’s middle class has for the first time overtaken the U.S. to become the world’s most populous—109 million Chinese compared to 92 million Americans.

I invite you to explore our exciting new slideshow that tells the story of how the People’s Republic of China evolved, from a struggling, divided communist nation in 1949 to an economic powerhouse today.

Discover how China became the world's second-largest economy - slideshow

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the link(s) above, you will be directed to a third-party website(s). U.S. Global Investors does not endorse all information supplied by this/these website(s) and is not responsible for its/their content.

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How these 12 TPP Nations Could Forever Change Global Growth
October 12, 2015

Historic. Landmark. Groundbreaking. Revolutionary.

These are among many of the words that have been used lately to describe the Trans-Pacific Partnership (TPP) trade pact, which was finally signed in Atlanta last Monday by 12 participating Pacific Rim nations.

The current members include Canada, the United States, Mexico, Peru, Chile, Japan, Vietnam, Malaysia, Brunei, Singapore, Australia and New Zealand.

runners on the starting line

After nearly seven years of negotiations, the TPP promises to deliver unprecedented free and fair global trade among the 12 participant nations.

Once ratified by each country’s congress or parliament—which is likely to happen in early 2016—the accord will become the most significant, most economically-impactful trade deal in history. As many as 18,000 tariffs are expected to be eliminated. It will remove barriers to foreign investment, streamline customs procedures and create an international investor-state dispute settlement (ISDS) system, among much more.

Global Purchasing Managers' Index Continues to Deteriorate
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The Peterson Institute for International Economics, a Washington, D.C.-based think tank, predicts that the resultant savings could boost the world economy by an incredible $223 billion by 2025.

Today, the 12 members control more than a quarter of all global trade, representing close to $10 trillion. But it’s estimated that once the TPP goes live, the trade percentage could climb to as high as 50 percent, according to CLSA.

The trade pact couldn’t have come at a better time. Global growth is slowing, and mounting tariffs threaten to suffocate trade. Even though the TPP’s full implementation is months and, in some cases, years away, it’s encouraging to know that positive change is on its way.

Having said that, no one knows the full details yet and it might be a while before we can see the official documents. When that time comes, we’ll analyze the deal to see which countries, industries and sectors stand to benefit the most. And of course the pact has already become the subject of criticism, targeted specifically at how it handles pharmaceuticals and intellectual property.

All in all, however, the world has needed such an agreement for years now to bring unilateral trade liberalization into the 21st century.

China Misses First-Mover Advantage but Isn’t out of the Race

The most notable player missing-in-action is China, and to a lesser extent Korea, both of which have taken a “wait and see” attitude. That will likely change in the coming years. China sat this round out because the trade deal would have imposed several stringent economic, labor and environmental conditions on the Asian giant, as it does on all TPP nations.

a penny-farthing economy o a precarious ride: governments must learn to balance monetary and fiscal policies to remain competitive globally

But China and Korea will doubtlessly have little choice but to join the team once they see the enormous benefits enjoyed by participating countries. China’s southern neighbor Vietnam, for instance, is expected to see a huge 10 percent boost in its GDP by 2025—twice as much as any other Asian market—according to Credit Suisse. Malaysia, a 5 percent boost.

The business relationship between the U.S. and China—the world’s two largest economies—grows stronger every day, and China doesn’t want to see its competitive edge dulled by other Asian countries that chose to be members of the TPP.

Here in Texas, where a lot of public signage is written in both English and Spanish, I’m starting to see more and more Mandarin, an indicator that U.S.-China relations are strengthening. The picture of the ad, which I took at the San Marcos Premium Outlets mall just north of San Antonio, is clearly targeted to Chinese tourists. It’s an ad for China Merchants Bank and reads: “In America, use Merchants Bank credit card! Very American!”

 

Vietnam Will See the Biggest Long-Term Economic Benefits

“Very American,” indeed. To be clear, the real winner in the formation of the TPP is the U.S., for whom the deal is as much about geopolitics as it is about trade. In a briefing this week, the National Bank of Canada writes that the TPP “would allow the United States to take the lead in setting the rules of commerce for about 40 percent of the global economy.”

But as I said, Vietnam is poised to see the biggest upside potential as a result of the deal. The Southeast Asian country is a large manufacturer and exporter of textiles, apparel and footwear, all of which the U.S. currently imposes a very high 17 percent duty on. That’s set to disappear, saving the country billions. Because foreign investment in Vietnam is expected to accelerate under the deal, banks, consumer goods and construction are also set to benefit.

Global Purchasing Managers' Index Continues to Deteriorate
click to enlarge

Malaysia is another country that stands to see sweeping changes. Right now the country doesn’t have a trade agreement with the U.S., Canada, Mexico or Peru. Once the deal is ratified and implemented, Malaysia’s vital palm oil, rubber, plywood, electronics, textile and automotive parts industries will be open for business to some of the world’s largest economies.

As for Japan, its all-important, $538 billion auto industry will receive a huge shot in the arm. Consultancy firm Eurasia Group estimates that the TPP could help add $105 billion to Japan’s GDP by 2025.

Say It with Me: Government Policy Is a Precursor to Change

Not only is the Trans-Pacific Partnership great for global trade but it also promises to help bring fiscal and monetary policies into balance. The deal is a welcome and much-needed development from a fiscal perspective, one that we haven’t seen from world governments in more than a generation. Lately, everything’s been about monetary policy—specifically quantitative easing and currency manipulation—to stimulate growth.  A reduction in taxes, tariffs and regulation also promotes growth.

Top 10 Most Competitive Countries, According to the World Economic Forum
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Here at U.S. Global Investors, we often say it’s the policy, not the party, that really matters. Republicans, Democrats and Independents alike are all capable of effecting change that can both move the U.S. forward as well as set it back.

On President Barack Obama’s watch, many new restrictive rules and regulations have been enacted in the U.S. that clog up the flow of capital like cholesterol and hinder business growth and innovation. I’ve written and spoken about these policies on many occasions.

At the same time, we must acknowledge that he’s been one of the most fervent champions for the creation of the TPP, even going so far as to stand up against several prominent members of his own party. I’m certain that in the decades to come, the TPP will emerge as the Obama administration’s crowning foreign policy achievement.

What the Influencers Are Saying

I’d like to end by sharing some compelling comments on the TPP by key policymakers, business leaders and economists. Their optimism should convince anyone that the TPP, once ratified, could end up being the best thing to happen to global trade in at least a generation.

To my Canadian friends and readers, I wish you a happy and blessed Canadian Thanksgiving!

Malaysia currently puts a 30 percent tax on American auto parts. Vietnam puts a tax of as much as 70 percent on every car American automakers sell in Vietnam. Under this agreement, all those foreign taxes will fall. Most of them will fall to zero. So we are knocking down barriers that are currently preventing American businesses from selling in these countries and are preventing American workers from benefiting from those sales to the fastest-growing, most dynamic region in the world.

U.S. President Barack Obama

This agreement in my view is truly transformational. To have one set of rules for 12 destinations is going to turbo charge regional supply chains and global supply chains and reduce costs.

Australia Minister for Trade and Investment Andrew Robb

Free-trade agreements create new opportunities for American companies and their workers. I thank the United States Trade Representative and fellow trade negotiators for their commitment to finalizing this agreement. U.S. companies need to be able to compete and win in global markets to support well-paying jobs at home. It’s critical we provide our manufacturers and exporters with the best tools to compete on a level-playing field in markets worldwide.

Boeing President and CEO Dennis Muilenburg

In many parts of the world, food and agricultural products still face the legacy of high import barriers. We believe the Trans-Pacific Partnership will allow food to move more freely across borders from places of plenty to places of need, which benefits farmers and consumers around the world.

Cargill Chairman and CEO David MacLennan

 

Canada’s mining industry has been a strong advocate for liberalized trade and investment flows for many years. NAFTA, free trade agreements with Chile, Peru, Colombia and other countries in Latin America, Africa and Asia have all helped to increase Canadian exports and investment, supporting jobs for Canadians here and abroad. TPP, representing such a massive trade block, including critical emerging markets, is a trading partnership Canada must not risk being left out of.

Mining Association of Canada President and CEO Pierre Gratton

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

Fund portfolios are actively managed, and holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more of U.S. Global Investors Funds as of 9/30/2015: The Boeing Co.

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Net Asset Value
as of 09/25/2017

Global Resources Fund PSPFX $5.78 -0.04 Gold and Precious Metals Fund USERX $8.02 0.06 World Precious Minerals Fund UNWPX $6.69 0.06 China Region Fund USCOX $10.96 -0.46 Emerging Europe Fund EUROX $6.94 -0.06 All American Equity Fund GBTFX $24.34 0.10 Holmes Macro Trends Fund MEGAX $19.99 0.03 Near-Term Tax Free Fund NEARX $2.23 No Change U.S. Government Securities Ultra-Short Bond Fund UGSDX $2.00 No Change