November 13, 2007

U.S. Economic Power: A positive forecast

Britain's Telegraph ran an interesting piece, U.S. will retake economic superpower crown where the author, Ambrose Evans- Pritchard offers an intelligible analysis of the American Economy.

Like a great battleship at sea, the US industrial and export machine is slowly turning around. Within a couple of years, its big guns will be sweeping the world again, ready to silence pious talk about America's trade deficit - and to menace chunks of Europe's manufacturing base.

The fast-inflating economies of China, emerging Asia and Eastern Europe will be reminded globalisation cuts both ways. Jobs can flow from Shanghai to Los Angeles.

US exports reached a record $140bn (£66.5bn) in September, powered by Prairie grains, Texas cotton, semiconductors, chemicals, even cars. "I put the US economy up against any in the world in terms of competitiveness - that's a fact," said US Treasury Secretary Hank Paulson.

The US trade deficit has fallen to $56.5bn, down 14pc in a year. The current account deficit has slimmed from 7pc of GDP in early 2005 to 5.5pc, and is narrowing fast. Bad, but no longer catastrophic.

This is the first fruit of devaluation, enough to hobble Airbus and prompt French president Nicolas Sarkozy to warn of "economic war" on Capitol Hill last week.


Evans - Pritchard also cites population factors as a principle reason for growth and paints a gloomier picture for other notable nations.

At the end of the day, the US remains the only major power still producing babies a rate high enough to survive through the 21st century as a dynamic society.

China's workforce will peak in 2015. The country will then tip over into the steepest demographic decline ever recorded. It will be old before it becomes rich, doomed to second-tier status.

Japan began to shrink in 2005. Russia will shrivel to 104m by 2050, on UN data. Germany, Italy and Spain are all going grey, succumbing to that status quo outlook that comes with age. Their economies may even start to contract. Yes, birth rates can rise, but only by cultural revolution, and with long lags.


Read the whole piece here.

I can foresee some of anti-American sentiment brewing in relation to his upbeat view on the U.S. His remarks challenge a chorus of writers who, every so often, dismiss the U.S. economy as, passé.

Comments always appreciated...

17 comments:

The Liberal Lie The Conservative Truth said...

Great post! It always amazes me how the very economies and economists who depend on the strenght of the US economy always love to forcast a gloom and doom account to meet with an obvious hate America agenda.

Yet whe a report emerges like the one you posted which shows the true strenght of the US economy it is met with disadin and sceptisism EVEN WHEN ECONOMIC INDICATORS prove the truth behind the report.

I always laugh at these gloom and doomers who cut off their nose despite their face in the reporting, yet take the money to the bank because of a string US economy!

Tapline said...

I tried to post a comment a while ago and it wouldn't go through. I'll try again......The only thing I was concerned with was the rising of the Canadian Dollar in relation to the US Dollar....Its really close to the American dollar and I can't remember when this has ever happened. I suppose that too can change, but it concerned me. Good post, we will see....stay well.....

heidianne jackson said...

evans-pritchard is spot on in it's population analysis. if the european countries don't turn the corner on reproduction VERY soon, they will soon cease to matter and eventually the countries will exist in name only. they will all be completely inhabited by muslims and industry and economy will NOT improve under that mantle.

great post, otto. thanks!

American Interests said...

Lib Lie Conserv Truth: Good point about the knockers also being relient on your economy...

Tapline: This has also happened with the Australian dollar which is at a 25 year or so high against the U.S. dollar...

Heidianne: I hope the Europeans arrest this population decline soon as it will present a real problem by 2030 onwards....

lisa said...

great post. thanx ott

Conservative Chic said...

Otto, another great post. The Europeans "passe" attitude will certainly come back to bite them in the butt eventually. China, obviously will go into a decline.

I'm not worried about the U.S. too much, we have our ups and downs but we always tend to even out, if not excel.

American Interests said...

Lisa: New you'd like it!!

Jen: Good to see you here...Hope you guys do excel; it's what the world needs even though most don't realise it. Hope all is ok at your end !!

Karen said...

Otto, great uplifting post! You are correct, the naysayers will pooh pooh this and brush it aside. Especially during presidential campaigns, the Dems love to talk down our economy and this time around they are bashing the very tax cuts that kept our economy strong, especially after the devastation of 9/11 on the market.

ArtfulSub said...

Good post. I'm doing an analysis of the oil-wealth Nations with a special focus on the Russkies.

Are they making good use of the nice profits they've made over the last 3-5 years?

NOPE!

American Interests said...

karen: At least some of us know the truth

artfulsub: Profits? Of course not! Thanks for coming by...

WomanHonorThyself said...

Hiya Otto!..Like a great battleship at sea, the US industrial and export machine is slowly turning around...I sure hope youre right buddy!:)

Debbie said...

Very interesting, especially about the birth rate in the US. I thought we were way behind in needed births, but had never really researched it. I do know that certain 'groups' of people (like Muslims) are having a huge increase in births. I have no problem with this, as long as these are not radicalized children that will grow up to hate their host countries.

Aunty Belle said...

Hey Sugar, real good post--I'se interested in how this is gonna play out. Thang what worries poor ole' Aunty Belle is I got a neighor boy who went to the Big Appel wif' his company and ALan greenspan was the speaker--Greenspan tole them kids that a "Depression is coming, sooner or later...probably sooner" all cause the Chinese don't value currency rightly and they's suckin up so much of the world's
resources. Gotta say, thas' scary.

BUt ultimately, it is the inventiveness and innovation fo the yanks (Thas' Aussie yanks too!)that wins the day--and China ain't got the knack

But on population--we is doin' better'n most--European leaders REFUSE to acknowledge what local mayors know: Italian mayors offering women 10,000 Euros to have a second baby...but guess what? Dern few takers....nope Europe is sinkin', it will be a miracle if they pull out of this tailspin.

Great fodder over here on your blog!

Best to ya!
Aunty Belle

American Interests said...

womanhthyself: Hiya Angel, oh I'm right ok???, your economy stumbles at times but no doubting its enormity...least I don't doubt...

debbie: In relation to most western nations the U.S. is doing well with population as to is Australia. The potentila trise in Muslim populations does concern me however, I feel that to often their children may be well, if not radicalised taught that America is evil. Something that sows the seeds or future problems.

aunt belle: Good to see ya here, read that great essay at your back porch see my comments.

Good comments thankx...

Goat said...

Otto, our economy has grown about ten Chinas since '00 not ten times that of China's but ten of China's GDPs. We are that slow moving frieght train that is nearly impossible to stop but Al Gore is trying with his global warming hype.

American Interests said...

Goat: Was it not you who suggested somewhere, that if were up to the likes of Gore, we'd all go back to the caves and eat nuts and berries?

The strength of the U.S economy must not be impeded by subjective opinions and the fear mongering antics of you know who...

Thanks Goat...

Goat said...

Yep, that was me, but I was referring to Al's minions in the environut/socialist movement.