This Week's Herman Trend Alert

Creating Extraordinary Customer
Experiences with Technology

 

  Global ABCs

Written by Jeff Thredgold, President & CEO, Thredgold Economic Associates
June 2, 2004

(This is the companion piece to May 19's "Domestic ABCs")

America-being the world's only superpower is just not what it's cracked up to be. Powerful U.S. economic growth now underway will help the global economy

Budget Deficits-a serious issue in the U.S. and around the world. The French, the Germans, the Japanese, and many others have similar challenges

China-powerful economic growth continues, with political leaders now trying to slow things a bit. China could eventually challenge Japan's position as "top dog" in the Pacific Rim

Dollar (the)-the enormous U.S. trade deficit with the rest of the world has contributed to moderate dollar weakness, primarily versus the euro and the yen. An orderly dollar decline, as has occurred so far, ain't necessarily a bad thing

Europe-growth has been barely above water during the past 30 months, hurt by a strong euro currency and rigid labor markets that limit hiring. Another challenge? Most European governments simply can't afford prior promises to their citizens of early retirement and extensive social programs

Free Enterprise-a way of life that continues to spread around the globe, while Communism and Socialism continue to fail. Was it only 20 years ago that half the world was under strict Communist control?

Growth-we expect the global economy to grow roughly 4.6% this year (after inflation), the best in four years. A similar solid growth rate projected for 2005 suggests the strongest two-year performance in a decade

Hunger-an estimated 40,000 people around the world starve to death every day…a major travesty. From a broad global perspective, the problem of malnutrition is now exceeded by the problem of obesity

India-which country features the longest-standing democracy, the largest middle-class, the largest English-speaking population on the planet, and the most people suffering with AIDS? …that's right

Japan-issues of weak banks, sick investment portfolios, shell-shocked consumers, and an enormous national debt remain. However, this island nation is showing clear signs of solid economic growth, primarily tied to rising exports to China

Korea (North)-political "leaders" in this nation ignore the massive starvation of their people and a failed economic system. Meanwhile, Korea (South) enjoys impressive economic growth

Latin (and South) America-economic growth is improving, especially in Argentina, Brazil, and Chile. Venezuela remains a political powder keg. Impressive flows of capital returning to smaller countries have been a vote of confidence in the future

Mexico-our Southern neighbor is seeing economic improvement. Why? The destination of 90% of Mexico's exports (the U.S.) is doing much better. The term that seemingly always applies to Mexico is "potential"

Neighbor to the North-Canada's economic rebound has been impressive in recent years. The SARS problem in Toronto, a strong currency, and "a mad cow" in Alberta slowed growth to a crawl this time last year. The economy is now doing better, with national elections in coming weeks

Oil-a handful of factors led prices to exceed $40 per barrel (see last week's Tea Leaf). We expect greater oil price stability in coming years near $30-$36 per barrel…a price that consuming and producing nations can live with. Substantially higher prices would provide consuming nations stronger incentives to develop non-oil energy alternatives...exactly what the Saudis (among others) DON'T want

Protectionism-the other major threat, besides terrorism, to global economic growth and rising global standards of living

Quagmires-there never seems to be a shortage. Today's list still includes Afghanistan, the Middle East, Chechnya, Iraq, and portions of Africa. Who's next?

Russia-solid economic growth has occurred in this hotbed of political back-stabbing and corruption, tied primarily to higher oil production and higher oil prices. The Russians may boost oil output even more

Saudi Arabia-global anxiety about the ability of the Saudis to protect their oil flows is sky high following two major terrorist attacks on Saudi oil facilities

Terrorism-easily the most serious threat to the U.S. and the global community. Any significant terrorist "successes" in major Western nations (especially the U.S.) could temporarily derail the global economy

U.N.-an institution that must step forward and assume more responsibility around the world. Wouldn't it be nice if the U.S. could just be one member of a more relevant and effective United Nations?

Volatility-pick any descriptor…political…economic…financial market

World Wide Web-the powerful explosion in U.S. internet activity is now followed by solid expansion around the world. One estimate has global companies saving $1.25 trillion in operating costs during the next three years alone by using the internet

"X"ports-a "key" to success for global companies...product quality is crucial…price is secondary in many cases. Despite all we hear about China as a major exporter, their appetite for goods from around the world is enormous. Good news? U.S. exports of $95 billion of goods and services to the world in March was the highest ever

Young People (around the world)-facing a rising tax burden in coming decades to finance the retirement years of Baby Boomers (and Boomers' parents) if minor changes are not soon made

Zones-three major trading zones-North America, Europe, and the Pacific Rim-still define the planet's future. Most expect two-thirds of the incremental growth during the next 20 years to take place in the Pacific Rim                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            


[
Home · About · Products · Resources · Media ]

 

7112 Viridian Lane
Austin, TX 78739
Voice: 336-210-3547
Toll Free in US & Canada: 800-227-3566
E-mail: info@hermangroup.com


  © The Herman Group. All rights reserved.

Web site design by WebEditor Design Services, Inc.