Quite excluded, the acceptance of the Staranalyst Martin Wolf seems to be indispensable by the Financial Times
Before worries about this surprising forecast, he will be a small billing with the blog "Conservative counterrevolution", which started to start trading years with Ronald Reagan and Margaret Thatcher and loud wolf "pretty sure" With the current "Great recession" Be finished.
Thus, the economic advantages of the US and Great Britain, which had been founded with liberalizations, privatizations and tax cuts, were therefore achieved by fragmentary developments. First "The expansion of the financial sector and the associated debt of households in the US economy and the Great Britain played too much role and the question is to what extent the growth resulting from these associated developments is an illusion:
The financial sector creates money and credit not only to pay in itself and to a horschar of brokers and agents, but also to finance construction booms.
It is expected that the next decade in the US and the Great Britain will now be supported both in the financial sector such as the households of debt reduction, while the willingness to raise the debts of the public sector to his political or economic boundaries Stobe. The combination of these factors thus blurred that the performance of these countries will now look a little as in Japan in the 1990s that was protected by chronic weak demand (see Japan’s exports once again).
Thus, the substantial current account deficits in these countries had admitted a shrinkage of capital-intensive industrial production, so that the two states have been relatively strong despite relatively low investments in real capital. This process will also turn back in the next decade and savings and investments now had to rise substantially according to Wolf, alone to hold the current growth level. If this did not happen, the growth, however, was even further aiming.
Due to the speculation bubbles, therefore, the underlying economic output of the US and the British had been met and therefore the next decade of Germany and Japan had to be taken, whereby Wolf disrupted his further enforcing fundamentation unfortunately on the statement that it is a good rule that unexpected to expect.
Bubbles Induce Severe Over Estimates of Underlying Economic Performance. Will The Same Prove True of the US and UK? I would be guess like that. Might The Next Decade Belong to Germany OR Japan, Instead? That would not surprise me either. Expect the unexpected. It is a good rule.
However, Wolf has already retained right, and who does not want to expect the worst of frustration on the ongoing political errors and underlines anyway only the worst, could actually find a few reasons why the youngest economic success of Germany could be more than a short technical back to the massive export bin during the crisis.
Much depends above all from China
In any case, Wolf’s scenario was allowed to require a continuing catch-up process in coarse emerging markets such as China, India and Brazil, which now further growing sales markets had to offer for German and Japanese products to fulfill Wolf’s expectations. After all, the raw material exporters, who also come into question as customers, could benefit from the fact that the rising resource needs of the emerious population-rich states coincides with the many cheap raw material sources. Highly falling commodity prices were allowed to be seen at best in the course of heavy global economic crises and with appropriate financial market panics and then only be prosperous phenomena. In this respect, at least from these countries with stable demand could be expected, which is probably less applicable to the competing industrialized persons, which so far, which previously present against Germany and Japan, high current account deficits and now to their financing boundaries, especially Greece, Spain and Portugal.
Ultimately, for the entire international environment, however, it will be crucial, whether China manages to lave halfway crisis-free by the next decade. The experience of the past is hoping that China continues to be able to handle even with severe economic disturbances. At the end of the 1990s, in the end of the 1990s, China had not participated in the ruinoses devaluation rack of the former Asian Tiger States during the Asian crisis. After a very heavy own credit bubble, the bankruptcy had a number of state-owned funds (the "Gitic crisis") can be creeped. Nevertheless, China has the minimal growth rates of growth of the eight percent.
Motivation to provide for stable growth transfers, is probably sufficient. For in political circles, as it is said, almost traditionally the fear that a glimpse of the growth rate could be worried under funf percentage that the entire political system together with unity party could be swapped by the corners. But even if the 40% debt expansion of the previous year will result in foreseeable depreciation, and / or real estate prices and stock basises collapse, the Chinese government is to be confident, nevertheless to ensure stable growth, which then does not necessarily have to be valid for international market.
Demographic development in Germany also could contribute to the economy
It remains clear that Japan and Germany were sophisticated in the last decade of depressive mood, general discomfort and relatively jerked labor income than euphoric speculative bubbles. The economic fashion, also to outsource all simple manufacturing in Cheap Weddingroons, is now largely divested, which could break through in the medium term on labor market and income. Undoubtedly, German and Japanese industrial companies have recently built much more real capital, so that they now have production capacity, with which they can better fulfill the demand from emerging markets to luxury gutters and industrial equipment than the USA and Great Britain.
Ultimately, with a little good will, even the threatening dynamics quite threatening in Germany and Japan can thus give positive aspects. First of all, one should first realize that the macroconomically relevant ratio is not young against old, but those between those who work, and those who do not work.
Apparently, the superiority of the Company currently leads to uncovered obligations of the pension and health system, which must be intercepted in the payroll system of a higher employment rate of women, lower unemployment and the further increase in the average pension approach and barely balanced with weaker economic development without rationing in the healthcare system can.
On the other hand, the baby boomers should begin with the pension thus to spend the accumulated savings, which could lead to a structural drop in the savings ratio, a tendency of high innerland consumption and rising imports – and that is exactly the most important prerequisite for many ocons, the most important prerequisite for the international To get imbalances into the lot. Of course, the donority of the pensioners were surprised by the fact that they have to calculate with traws, forty more years of life and probably flourished, maybe once to finance a significant care effort themselves. In addition, in the face of stagnant incomes, more and more people can be glad if they do not go as a net public pension, while the particularly rich tends to increase their wise but not to multiply and then reinforce.
Wolf’s guess was allowed to have been fed by the youngest economic statistics. Thus, the only argument that US ocons can still bring about a speedy other jerking of the US into the recession that is usually used "heavy shock" required. However, not only the US house market is heavier in the ropes than ever, also the Aufenhandel shows again questionable developments. So the US could have their exports in 2. Although the quarter increase by 9.1 percent, but almost twice as high imports shot by 32.4 percent in the high, so that the Aufenhandel has reduced US GDP by 4.45 percentage points. So not enough, the long-term investments, which had even been attracted in the first half of the year, also backed up in July for the first time, which was most recently that important capital producers such as Cisco of one "unusual uncertainty" talk among their customers.
Japan, that has been suffering from the bursting of his huge bubble for three decades, well, was probably falling for an economic one "rebound", Apparently, however, there is still a lot of crusted structures. After all, it is about a year ago for the first political change of power since the 2. World War I came to what a sign could be for finally Japan moving back. For the time being, Japan, however, fights with a weak indoor economy, falling prices and the highest state of yen for the dollar for 15 years, which makes the first intervention of the central bank at the foreign exchange market since 2004 more and more likely.