I look at the economic state of the world and I’m bummed. Where’s the good news?
I’m an optimist by nature. And I believe that the only way to make money investing is to be an optimist. So my mood is not my usual state of mind.
The US and most of the developed world is bankrupt. The debt in the US and Europe and Japan has reached a point where the compounding of the interest means that there will never be a point where the debt is not growing. The only way for governments to get out of this mess is to hyper-inflate.
China is bankrupt too. The banking system is totally bankrupt. Kiss it goodbye!
Where is the growth going to come from? The US will provide some growth but not as much as the past. The debts are too high and taxes will be raising. Inflation kills an economy and that is coming in a year or two.
Europe and Japan are dying slowly. Their populations are declining so increasing economic growth can only really come from increased productivity. So look for almost no growth from here.
So that leaves China, India, and SE Asia. India will continue to grow but they need to open their economy more to get another boost. China will grow for a while but they are only a few years from starting to have a declining population as well as an explosion of old people. So they will be saving like crazy not spending like the government wants them to.
SE Asia lives off of China these days so they will follow China.
In the final analysis, I believe that human ingenuity will overcome all obstacles. Free people can accomplish anything! But the challenges over the coming 10 years will dwarf the challenges of the last 10 years.