With the 24x7 news cycle, twitter, instantaneous communications, etc we quickly get concerned about things that don't matter. Often there are key underlying truths that balance out the hype and drive the world towards a more rationale and simpler reality. The trends include:
US
- US Productivity and per capita GDP far exceeds any other nation. The US has an inherent resilience that drives innovation like no other country.
- Though US financial stability is in question, investors that are diversifying risk are compelled, by the shear size of the US market, to continue to invest in the US. There are few other locations big enough to take investors money.
China
- China is very dependent on exports to the US. It has a lot of domestic reasons to buy US debt to keep that export market alive.
- China is a huge market opportunity. At some a dynamic middle class will emerge there. That middle class will push for improved working conditions, salaries, benefits etc. When it does it will also consume. As it shifts from exporter to consumer, its internal growth will stall.
- Like the US, and unlike many other countries, China respects personal innovation and people that run businesses.
