A Bloomberg Businessweek article suggests that, even though the American economy is doing well, global issues could change that very quickly.
The market goes up and down, but by and large, the U. S. economy is doing well. But beware. According to a Bloomberg Businessweek article posted late last year, since we’re part of a global economy and, even though the U.S. has weathered the recession storm, a big chunk of the globe still has issues.
The article cites the IMF which called global growth ‘mediocre’ this past October, and Chief Economist Olivier Blanchard wrote, “Secular stagnation in advanced economies remains a concern.” Meanwhile, emerging markets need inflation to grow the way they once had. So if you’re concerned about the global economy, where should you focus your attention? According to the Businessweek article, here are a few of the major issues:
- The global economy is not recovering at the necessary speed. The IMF had predicted a 4.8% growth by 2015. That growth rate is now estimated to be 3.2%
- South America, specifically Venezuela, Argentina, and Brazil are “a mess” while Russia and Western Europe are weak
- Expect fights over taxes and spending in the euro zone, where Germany’s pushing austerity and that can make economic growth difficult for other, less flush, European nations
- The geopolitical situation can blow everything up. Russia, North Korea, the Middle East, terrorism; all can interfere with economic success
But for the U.S. skies are sunny for now. The oil and gas boom has decreased our dependency on foreign oil and it has contributed to a surplus which results in lower prices, although we know that prices will fluctuate for quite a while. What is also spurring growth is innovation. Normally, according to the article, consumer spending is what gets the country moving again. But consumers are still trying to pay down debt that had been incurred, so business is really taking the lead. Companies have record amounts of cash than can be invested in new technologies. New technologies that are seeing tremendous growth in the U.S. include: drilling and mining technology, spurred by the oil and gas rush; medical gear, spurred by both Ebola and changes in healthcare; and advanced passenger jets.
Get a more encompassing view of the world by reading the full article here.
This article first appeared on the NationaLease Website.