The world is changing quickly. The global economy (and it is truly that now) is rapidly developing. New economic powers are emerging. China, Brazil, India, and Eastern Europe are all staking places in the new world, and with that comes the talk that the US is falling behind, that the US needs to do something before it becomes irrelevant. My friends, this just ain’t gonna happen in our lifetimes, for sure. Not only is the US economy the most formidable economic force on the planet, it is also still the richest country in the world with resources that dwarf those of the emerging economies. This fact, and the fact that one of those resources is the much heralded American entrepreneurial spirit, points to a bright near-term and long-term future. From my perspective as a trader and investor, I like the near-term opportunities that are emerging as I write.
Way back in 2010, when I saw the Obama administration’s direction for the US economy laid out in the “stimulus” plan and in the 2010 budget directives, I knew then that the US economy would be taking a sharp turn in a new direction. At that time, unprecedented amounts of US tax dollars were directed toward transforming US energy sources, beefing up biotech research, and invigorating small business development. Despite the ideological and political rhetoric about this, the fact remains that the US government has been, still is, and always will be the sugar daddy for American entrepreneurialism. And one other fact is that the market has followed right along, much like the tag-along little brother of a high school superstar.
I knew then that trading and investment opportunities would arise from the government investments and I understood the US economy would never be the same – it would be morph, as it has done at least three other times in US history. The first major step in the transformation is the completion of the shift from an analog-based economy to a digital-based economy. The US government needs to do little now in this regard, other than get out of the way. It already contributed the Internet and substantial financial incentives to get Silicon Valley up and running, and now, after a brief setback in the early part of this new century, it is running full throttle. Expect lots more opportunity from the technology sector, as I have been saying for some time now, as well.
And American exporters are changing. Some of the products–Boeing jets, Microsoft software and Hollywood films–are familiar. But there is a boom, too, in high-value services (architecture, engineering and finance) and a growing “app economy”, nurtured by Facebook, Apple and Google, which employs more than 300,000 people; its games, virtual merchandise and so on sell effortlessly across borders. Constrained by weakness at home and in Europe, even small companies are seeking a toehold in emerging markets. American manufacturers are recapturing markets once lost to imports, and pioneering new processes such as 3D printing.
Stay tuned in this week, as I continue to lay out opportunity arising from a changing US economy. And speaking of opportunity, seriously consider the information below
Short sales on the New York Stock Exchange have climbed above last September’s peak, a level that preceded a five-month rally [S&P500 advanced 21%] and heralded major losses for bears.
Trade in the day; Invest in your life …
