U.S. & China unexpectedly shift roles in world economy.
Quote:
The world economy’s two biggest tectonic plates are shifting, setting off the frictions increasingly evident in financial markets and global capitals.
The U.S. is accelerating and China is cooling, marking a reversal of trends that followed the financial crisis. As a result, oil is slumping as American supply rises and Chinese demand falls; capital is fleeing emerging markets; the dollar is surging and the influence of the BRICs is on the wane.
While the biggest losers comprise commodity producers and emerging markets, Russia’s Vladimir Putin is proving the most exposed. His economy is headed for recession as the plunge in crude and the ruble deepen the impact of sanctions stemming from his aggressiveness in Ukraine.
“The shifts we’re seeing in the global economy show the potential for unintended consequences and unforeseen tensions,” said Lena Komileva, chief economist at G Plus Economics Ltd. in London. “Emerging-market vulnerability, headlined by Russia’s crisis, could trigger more safe haven flows.” A strengthening U.S. and slower China once topped the wish list of international policy makers who repeatedly expressed concern that America was stagnating and China was overheating in the aftermath of 2009’s international recession.
Their hopes are now being realized. China is on course to grow the least since 1990 in 2014 as a slowdown in real-estate investment continues and factories are shuttered.
Meantime, the U.S is gathering momentum with economists surveyed by Bloomberg News betting on a 2.9 percent expansion next year, the fastest in a decade, as hiring accelerates and falling gasoline prices boost purchasing power. Tomorrow, the Federal Reserve may move closer to raising interest rates for the first time since 2006.
This also does say something about the Obama years; it's pretty significant that the two largest economic threats to the US are reversing their trends right now and the US is growing stronger.
This is all controlled by speculation tbh, but better than the alternative.
Side note tho...It's so sad Pres. Obama won't get his due as one of the greatest American presidents until probably after we're all long and gone and this period of time is looked at objectively. He's has his faults just like every other president, but the numbers don't lie.
