Update- Growth and Debt
The late Richard Pratt famously remarked that when facing a challenge he would always ask the following three questions-
What is going on here?
What is desirable?
What is possible?
We have attached three slides for you to consider.
The first slide looks at the rate of growth in GDP per capital in China versus the United States. In just over four decades, China has managed to do what it took the United States 300 years to achieve.
The scale and rate of growth is unprecedented.
The second slide shows a US$10 trillion increase in the level of debt/money provided by the 6 biggest Central Banks since the 2008 Global Financial Crisis.
If you then delve into the third slide you can clearly see that deleveraging has not occurred in the developed world because government debt has replaced private debt.
Clearly the macro economic signals have the emerging/developing world growing at an extraordinary rate while at the same time the developed world is equally borrowing at a staggering rate.
These growth rates cannot be sustained and when they fall investors will be given the opportunity to buy more quality assets at discounted price.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me via Contact Us or to call me on +61 2 9267 2322.
4th-June-2014 | 
