http://www.dailyreckoning.com.au/us-gdp/2007/10/31/ An independent perspective on the Australian and global investment markets Sat, 21 Nov 2009 10:39:45 -0600 http://wordpress.org/?v=2.8 hourly 1 http://www.dailyreckoning.com.au/us-gdp/2007/10/31/comment-page-1/#comment-4294 Victor Vyssotsky Thu, 01 Nov 2007 16:00:29 +0000 http://www.dailyreckoning.com.au/us-gdp/2007/10/31/#comment-4294 From an American who can remember the 1930s. Sometimes during my life Americans have been living high off the hog; sometimes not. Most of us have worked real hard at times, not so hard other times. The past few years have been better for most Americans than the 1930s, 1940s, 1960s, 1970s; the next few years may not be as good. So be it. As the US $ declines, not only will others buy into the US, but US imports will decrease and US exports will increase, helping some, hurting some. What really counts, though, is whether the US participates fully in new aspects of the world economy as they develop, and those are hard or impossible to foresee. If the US manages to be in the first wave of future important developments, as it was in the case of commercial jet aircraft, computers, television, etc. the next generation of Americans will be well off; if not, the US will become sort of like Argentina is now, with a few people doing real well and most struggling. I've lived in Morocco and in Brazil and seen a bit of how other parts of the world work; if I were to place bets (which I won't) I'd bet that relatively, Brazilians will see more improvement in their lives over the next 25 years than Americans will. But, people adapt, including Americans, and if Americans have to make do with cheap domestic beer rather than good Australian wine, hardly anyone will think about it, in the US or elsewhere. I will pose a question to Australians, though. Is Australia well positioned to move ahead in the 21st Century? My suspicion, not knowing the situation that well, is that to do well over the coming years, Australia is going to have to shift its economy farther away from commodities (metal ores, farm goods, timber, oil, ...) toward technology-based services. Can you do that? Will you? From an American who can remember the 1930s. Sometimes during my life Americans have been living high off the hog; sometimes not. Most of us have worked real hard at times, not so hard other times. The past few years have been better for most Americans than the 1930s, 1940s, 1960s, 1970s; the next few years may not be as good. So be it. As the US $ declines, not only will others buy into the US, but US imports will decrease and US exports will increase, helping some, hurting some. What really counts, though, is whether the US participates fully in new aspects of the world economy as they develop, and those are hard or impossible to foresee. If the US manages to be in the first wave of future important developments, as it was in the case of commercial jet aircraft, computers, television, etc. the next generation of Americans will be well off; if not, the US will become sort of like Argentina is now, with a few people doing real well and most struggling. I've lived in Morocco and in Brazil and seen a bit of how other parts of the world work; if I were to place bets (which I won't) I'd bet that relatively, Brazilians will see more improvement in their lives over the next 25 years than Americans will. But, people adapt, including Americans, and if Americans have to make do with cheap domestic beer rather than good Australian wine, hardly anyone will think about it, in the US or elsewhere. I will pose a question to Australians, though. Is Australia well positioned to move ahead in the 21st Century? My suspicion, not knowing the situation that well, is that to do well over the coming years, Australia is going to have to shift its economy farther away from commodities (metal ores, farm goods, timber, oil, ...) toward technology-based services. Can you do that? Will you?

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