Saut: The World Is In Its 3rd Super Cycle In The Past 200 Years

"...Then, in November of 2001, China joined the World Trade Organization, and I believe that put the world into its 3rd ‘Super Cycle’ in the past 200 years. 

I expect notional world GDP growth going forward to be somewhere around the 4% level. If you look at China’s economy, it is softening somewhat over there, but if feels to me like China has bitten the bullet and they are getting ready to accelerate again.

They have drawn down inventories over in China, and with domestic consumption still improving, I think they are going to have to crank back up the manufacturing sector. So I’m not one of these people that thinks China is going to implode, and I think over the next 15 years you are going to get the outsized economic growth from the frontier and emerging markets.

If you look at what China is doing, they are following the business model and economic model that Brazil figured out back in the mid-2000s. They figured out that they needed to stimulate some domestic demand, and I think China realizes that as well.

The know that in the long-run, the manufacturer/export driven economic model they’ve been operating on for 15 or 20 years is not sustainable. So they are trying to stimulate domestic demand. The way Brazil did that was to raise interest rates, which strengthened their currency. 

Brazil’s economy slowed a bit, but still kept growing. Then, lo-and-behold, they stimulated domestic demand, and I think that’s exactly what China is doing.”

at http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/7/17_Saut__The_World_Is_In_Its_3rd_Super_Cycle_In_The_Past_200_Years.html