Here is a quick, straight and honest answer: NO! NEIN! Ð¾Ñ‚ÐºÐ°Ð·! CLARO QUE NO!
And here are the reasons why:
1. NO MORE FACTORIES
If we recall from my book, Economic Rip Tide, during the 1970′s and 1980′s, the Western Power Groups, in their search for CHEAP LABOR, sold the majority of their factories to China and other Asian countries.
In China and Asia, the Power Groups found cheap, hard working labor, with governments eager to assist in terms of taxes, benefits, laws and even construction of new facilities.
If you were an intelligent, trained Businessman, which are what the Power Groups consist of, you would not keep your factory in the West. If you, an entrepreneur, were thinking of opening a new factory, or wanted to produce a new product, the name CHINA would instantly come to your mind.
Which businessman wants to deal with the Corruption and Legal Handicaps of the USA and Europe? Who wants to invest hard earned capital in a swamp crawling with Legal Snakes, Corrupt Politicians bent on winning votes with their illiterate constituents, and Immoral Lawyers who are ready to tear an honest businessman apart if they can make a dishonest dollar?
Thus, no new factories are opening in the West. Only firms, like banks, backed by taxpayer funds, are hiring workers.
2. NO NEW FARMS
Agricultural companies, formerly called “Farms” have been sent abroad during the same time period and for the same reasons.
Europe and the USA, during the 1960′s and 1970′s was flooded with food products. Dairy farming was so intense and so productive that economists spoke of “Mountains of Butter.” Wine was so plentiful, that investors spoke of “Lakes of Wine.”
Those days are gone.
The USA sent its farms to Latin American countries, where the labor is cheap, works hard and the government is grateful to the investor.
Europe, now a Common Market, not individual countries with a history of agriculture, sent its farms to North Africa, the Middle East and also to Latin America.
Aquaculture, the new method of farming fish and seafood is found in Asia. Vietnam, Thailand and Indonesia produce all the shrimp and tilapia and squid needed.
A country’s productivity is a combination of worker skills and habits and the Technology available to the worker.
More technology equals greater productivity per worker and therefore less demand for workers to produce the same goods. Technology is on over-drive!
Workers are producing more per hour than they ever did in the past! Hence, less demand for workers. More unemployment. The Economy is pushed into slower growth, or, even Decline…
3. POPULATION GROWTH
Although the rate of growth of the population is slowing in Europe, it is not in the USA.
The birth rate of Educated European Women is declining.
In the West, women decide if they want to have babies. In Japan and in some other small areas, this is also true. In the rest of the world, women are coerced into having babies, where the culture so dictates, or they have no means of preventing pregnancy, such as we see in Africa and other poor areas.
In some countries in Europe the birth rate is declining rapidly. In Italy and in Spain, this is the case. Russia is so concerned about its declining birth rate and its population, it is offering incentives to couples to have babies.
Because of the decrease in the birth rate, many European countries are eager to have immigrants with a tendency to high birth rates.
This causes the population mix to change. Those populations with increased immigration, become skewed to less educated and skillful workers, and more uneducated and unskilled workers.
This mixture is, therefore, less able to perform well in the modern market and the economy begins to fall as the unemployment rises.
5. ENERGY AND FOOD PRICES
Since the World Population is growing steadily, the demand for Energy in the form of Petroleum and the demand for Food in all forms, is ratcheting upwards every hour.
In addition, what were once poor populations, with no capacity to buy motors or extra food are now becoming richer populations with the ability to buy vehicles and more food.
As an example, General Motors sold more cars in China during the last 12 months than they did in the USA. The need for more gasoline and more food is becoming quite obvious in the commodity markets.
6. PRICES ARE RISING FOR ENERGY AND FOOD!
Energy and food are indispensable. Other products are not.
There is a growing shortfall in the purchasing power of the Western populations. That shortfall will translate into declining economic growth.
If we analyze the six propositions listed above, we must conclude that the economic growth in the West must decline.
Such a decline will occur in a WAVE FORM. There are no straight lines in nature, and Economies are natural phenomena.
We can, however, see how investors are behaving. Investors put their hard earned and difficult to save capital into equity (stock) and commodity markets with the intention of earning profits.
In the equity (stock) markets they are investing in ESTABLISHED INTERNATIONAL CORPORATIONS, such as IBM, McDonald’s, Boeing, etc., or they are placing their money in the new Emerging Markets, such as, China, India or Brazil.
Otherwise, shrewd and experienced investors are taking the tried and proven path, by investing into commodities such as Gold, Copper or Oil.
In all cases, Investors are demonstrating that they do not believe a Recovery is present in the West.
I, personally, believe that these investors see economic reality with 20/20 vision.