I would like to comment on a part of this Weinberg article; here is the context;
"If you listen to the Europeans," says Weinberg, "America's economic
recovery is flawed and will fail. The Yanks spend too much, save too little,
and can't afford to finance their own consumption. But there's no real
evidence that the U.S. economy is in danger of faltering, or that growth in
Euroland will amount to much this year. So I think the euro's rise is more of a
speculative move, driven by hot money, than a shift based on fundamentals."
Point 1: In the US at least consumers have access to money and credit, where despite our Governments slice of the economic pie, it's proportionaly smaller than in the Euro economies.
2. Taxation in Europe is ridiculously high for supposedly free economies, in fact these economies are shadowing freedom, wholly uncommitted in the long term, the evidence is that he ebb and flow of politics inches inexoribly toward more and greater shares of national GDP.Class Struggle remains Europes underlying weakness.
3. There is no guarantee that the Brits will go off pound, there is political momentum, but in the face of popular belief, a referendum would probably be rejected, if that happens in 2003, Germany may decide that a reversal of fortune may be it's best medicine.
4. The US economy is in sector rotation, meaning that underfunded portions of the economy are recovering while overfunded parts are consolidating.
5. Consolidation will begin to show itself in increasing M&A activity or via the bankruptcy courts, balance sheets of those acquiring will become stronger, as the costs of running their future enterprises were purchased at fire sale prices. That is the difference between success and failure long term, you make your money on the costs side of the business, and real value is being created out of this period of uncertainty.
6. Consolidation in some sectors will take years, not months to show itself but show itself it will, as the markets will accumulate with anticipation investor despiration pointing to recovery for the sectors without hope.
7. The US economy will be affected by increasing market penetration of alternative energy, new materials, and productivity gains from the recently constructed infrastructure will surprise most investors and consumers alike. While Europe fights politically GREEN issues, Actual deployments by entreprenuers of advanced iterations of Solar, hydrogen, wind, and other new materials will remake the US landscape. US consumers & business will have more choices, and those choices will manifest by implementation, not political /social machination.
8. Russia will emerge once again as the country the Europeans love to hate, as growth rates and flat taxes demonstrate, the truth behind the concept "Been there and done that", something the Europeans refuse to see.
Just some thought to go along with a pretty fine piece. |
