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Brazil: The World’s New Global Titans
“The new global titans to emerge from the Great Credit Crash of 2008-2009 don’t lie in the industrialized economies,” says Investment Director Eric Roseman.
“Rather, the new leaders will emerge from advanced emerging market countries like China and Brazil whose economic infrastructure and domestic consumption have remained relatively resilient since the emergence of the credit squeeze 19 months ago.”
Eric’s got plenty of reasons to like China and Brazil, “The degree of financial leverage in China and Brazil is far less than the non-performing loans and toxic assets still plaguing banks in the industrialized markets.
Banking systems in most countries across Europe and the United States are effectively insolvent and highly dependent on state intervention to fund liquidity and bailouts. But that’s not the case in China and Brazil where the extent of speculation was nowhere near as aggressive as Wall Street or the City of London prior to 2008. New global economic leadership will emerge from this crisis, which marks the beginning of the end of American financial hegemony. And that leadership will be domiciled in places like Shanghai and Sao Paulo.”
But he’s not buying just yet…
But he’s not buying just yet…
“I’m not buying China or Brazil now. I’m waiting for another correction to materialize following a dramatic advance since March. Though both markets have seemingly decoupled from New York, it would be naïve to assume this can continue if the American economy continues to contract and domestic consumption fails to recover over the near-term.”
“Yet it seems quite plausible that these new global titans will continue to dominate global trade and finance over the next decade and beyond as the balance of economic power is transferred from the West to emerging markets in the East and Brazil. The near-destruction of the Anglo-Saxon financial model has accelerated this eventuality and will propel China and Brazil to the forefront of most traditional investment portfolios as their respective markets grow larger and become mainstream indexes in global portfolios.”
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