Emerging Markets Shed the Skin of US Consumers

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’s growing. India’s growing. Brazil is growing. Dozens of other countries are growing. Sales in the US aren’t likely to go up. But sales to China? Sales to Brazil? That’s where the money is.

And here’s something interesting – these growth economies are now largely ‘de-coupled’ from the US. They don’t need us anymore. We’ve 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’t continue. We’ve taken on all the debt we can handle. They’ve got their factories, their capital and their skilled labor. We’ve got debts, debts and more debts.

And now they don’t need us. Because they can sell to their own emerging middle classes. China can sell gizmos to Brazil’s new consumers. Russia can sell energy to China’s thriving cities. Brazil can sell soybeans to Indonesia’s new factory workers.

Emerging markets are growing fast. The US and the UK are barely growing at all.

Bill Bonner
for The Daily Reckoning