Salient to Investors:
Zanny Minton Beddoes at The Economist said:
- The economy’s fundamental drivers, particularly rapid technological change, means that the rewards disproportionately go to the top.
- The latest IMF research suggests that you get stronger and more lasting economic growth in societies that are more equal.
- The last time we had this huge a technological change – the Industrial Revolution – we also had huge changes in public policy.
- The world has incredibly low interest rates and a big need for more spending on infrastructure so it is a no-brainer to do that.
- India is the shining example of a country with remarkable economic growth and devotion to classic liberalism and to free markets.
- A lot of China’s growth came from liberalization but more recently from debt-fueled investment binge. China is naturally slowing because it is richer and aging fast.
- The US economy has accelerated in the last 6 months. Inequality and an aging population are challenges so rapid growth is going to be lower than it was 30-40 years ago.
- Europe is still a mess. Japan shot itself in the foot with its consumption tax. The emerging world, including Brazil, is slowing.
- The difference to the last time the Saudis let oil prices stay down for a while is that this time the shale investment time is much shorter than for traditional oil drilling. The oil market economics has shifted from one of OPEC domination to one that is supply and market driven.
- Putin’s paranoia is under-appreciated as is the depth of his desire to remain popular.
- Venezuela is headed for default quite soon.
- The disproportionate losers from lower oil prices are also the tricky regimes, like Nigeria, Russia, Iran.
- The short-term risk to the global economy is too much reliance on one engine, the US, an echo of the 1990s. Longer term, the risk is political economy fueled by stagnant living standards for the majority.
- We are nearer the beginning than the end of this huge technology revolution.
Watch the video at http://www.charlierose.com/watch/60514294