Happy New Year!!


The old year is gone and 2011 is on the job. His will be a tough life. The world is in distress. Europe is struggling to keep its common currency afloat and old nationalistic feelings are creeping up. Germany is the strongest economy and the social fabric is the most pragmatic. Greece, Spain, Ireland are already in trouble, having borrowed way more than they can sustain. Portugal, Italy and others are also at risk. Germany once dominated much of Europe militarily and now it is becoming dominant economically. Perhaps there is something in the genes.

The United States, too, has borrowed much more than it can sustain in the long term. We can support the debt for awhile but ultimately we must get our house in order. We are no longer completely impervious to the concerns of the world. We are rapidly losing the distance between ourselves as the giant killers and the rest of the world. China is rapidly closing the gap. Russia is trying as well. The quiet one, India, is growing economically and is about as large as China when it comes to population. It too is growing at an annual rate well above the ‘developed world’ and is closing the economic gap.

These growth rates in Chindia, the new buzz word, will propel the demand for goods and services for the next decade. Together China and India (Chindia) contain about 33% of the world’s population, where the USA is only about 4.5%. As they grow and more want cars, refrigerators, washing machines and all the rest of life’s good things (not to mention the energy it takes to make them work) the demand for these goods and services will grow at an unprecedented rate.

Opportunity will continue to knock in these places. The USA will recover but by the time it does, the level of caring in the business world may have diminished significantly. The need for strong exports to the USA will be replaced by domestic demand in Chindia. This will make us less important to them and us ever more dependent on them. The net result is higher prices for imports in the USA. To many of us, that will feel like inflation unless the dollars strengthens sufficiently to offset the change. Unless we get spending under control, we will become less vital and critical to the world and more marginalized in world politics. Europe could find itself again dominated by Germany through its own decisions. Remember a United EuroZone is similar to the USA in population. Even together, we only one fourth as large as Chindia. By the way, Indonesia is only a little behind the USA and the EuroZone in population. If you look to all of Asia, we are out numbered by more than five to one.

Guess where business opportunity will lie between now and 2050? Where will the demand for Infrastructure, housing and all that goes with it, cars, clothes and more be?

It is time for us to be teaching our children Chinese; language, customs and traditions, so that they better understand the wants and needs of the largest customer segment in the world. Oh, India speaks English as an official language already which makes them easier. But we need to learn traditions and customs so that we better understand the other largest customer segment.

At home the new year means a new congress that must take the deficit seriously. They need to take a hard look at Obama Care and prune the parts that over reach to make the overall program healthy and sustainable. It may take more than one year for some challenges to work their way through the court system. Legislative modification could remove the premise for the challenge if it is handled properly. I’m not holding my breath.

We are two years out from another presidential election. Obama and the Dem’s will be posturing for that, while the Republicans are looking for a viable candidate. I just hope that doesn’t stop us from moving forward on issues that are important to the nation and our future.