Somebody forgot to tell the world that the markets were going to suffer due to the specific U.S. problem of subprime loans. Many of the major global markets in Europe, Asia and Latin America are at new highs for 2007, and many others are approaching their highs of February. Holland, Austria, Canada, Australia, Singapore, Korea, Indonesia and China among others are in the first group.
THE U.S. ECONOMY NO LONGER DOMINATES THE WORLD GROWTH TRENDS
This further amplifies our point that the U.S. no longer calls the tune for the world markets, and the profits are largely flowing from strong business in Asia. It is Asia that is raising the world’s economic growth rate. Most countries are enjoying rising GDP numbers. Only in the U.S., is the subprime problem slowing down the growth rate.
Global liquidity is the reason for the growth, and we believe that it will continue due to a weak Japanese yen leading to a strong global lending environment. Central banks seem to be unwilling or unable, to slow global liquidity flows. We see this as a continuing good investment environment, and barring tariff problems and trade wars, global economic growth will continue through 2007 at a rapid pace.
WE CONTINUE TO FAVOR THE SAME THEMES
• Growth of China and India
• Energy-both alternative and traditional energy located in the emerging world
• Transportation- the building out of the global infrastructure will include significant investment in rail systems and regional airplanes
• Base metals are needed to build global infrastructure
• Global financial services-as the world shrinks, investors and corporate managers look for global players to help them expand and invest for the future
• Precious metals and non U.S. currencies will benefit from the expected continuing decline in the value of U.S. Dollar
• Food production-the world grows richer and is eating more (and more expensive) food.