The Long Term Outlook, from Laurel Kenner
The best returns on investment will be in the U.S. over the next decade. That’s the word from Louis Gave of Gavekal Research, a research firm that provides consistently smart, independent macroeconomic analysis to Wall Street.I'm more inclined toward a "It's the tallest pygmy" view but as I've been hearing more and more recently, what's the alternative?
The three defining trends of the past decade – skyrocketing U.S. spending on guns and butter, the economic rise of China, and the single European currency – are all coming to a screeching halt. That’s why, says Hong Kong-based Gave, “all of the clients we’ve seen on this trip have been exhausted and grumpy.”
Looking forward, according to presentations by Gave and his colleagues at the University Club in New York City on Dec. 15, the picture brightens in the United States. Government spending, for the first time in decades, has slowed to zero growth. Private job creation has resumed growing. Increasing automation in manufacturing will encourage factories to be located once more in the United States, to minimize transport costs. To get dollars in the future, countries will need to sell not manufactured goods, but assets, and the dollar will strengthen accordingly.
In the self-admittedly Panglossian Gavekal analysis, fears of a 2008-style disaster emanating from a freeze in European banking or a bursting bubble in China are overblown....MORE