Emerging markets no longer need the US consumer
Want to know how to make money in this economy? You do it by selling things to markets that are growing. Exporting, in other words. China鈥檚 growing. India鈥檚 growing. Brazil is growing. Dozens of other countries are growing. Sales in the US aren鈥檛 likely to go up. But sales to China? Sales to Brazil? That鈥檚 where the money is.
And here鈥檚 something interesting 鈥� these growth economies are now largely 鈥榙e-coupled鈥� from the US. They don鈥檛 need us anymore. We鈥檝e done our part. Thanks to clever management by the feds, Americans went deeply in debt so that these emerging market economies could grow. They put up factories. We bought their output. They logged a sale. We added a debt.
And now, we can鈥檛 continue. We鈥檝e taken on all the debt we can handle. They鈥檝e got their factories, their capital and their skilled labor. We鈥檝e got debts, debts and more debts.
And now they don鈥檛 need us. Because they can sell to their own emerging middle classes. China can sell gizmos to Brazil鈥檚 new consumers. Russia can sell energy to China鈥檚 thriving cities. Brazil can sell soybeans to Indonesia鈥檚 new factory workers.
Emerging markets are growing fast. The US and the UK are barely growing at all.
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