Many economists will have you believe that without the American buyer the world is in trouble. Maybe. There are more than a few wise economists that will tell you that instead of the engine of global growth the United States is the caboose. There are some not so surprising statistics pointing to the back of the train theory in a recent article on The Economist.com titled “Shopaholics wanted.”
Going Up
Keep in mind emerging Asia is growing fast. According to The Economist.com article in the past five years consumer spending in the emerging Asia area has grown by 6.5% annually. This is much faster than any other part of the world. Many of these emerging nations (China, South Korea, India, Indonesia) are just now beginning to create financing for consumer durable items which will certainly facilitate more consumer spending. It does not hurt that China is putting loads of new cars on the road everyday. Prosperity is the goal in this area of the world. These countries have worked hard, saved, and have been subsidizing our lifestyle for a long time. Now it may be their turn to have a few nice things.
Realization
There will be a wake up call when (not if) the emerging Asian nations shift their focus away from exporting to the developed world and more toward filling domestic demand. The economists out there that continue to think they are riding in the engine will finally wake up in the caboose. In the end demand for goods is what will be needed to get the global consumer train running again. We in the U.S. have been driving the consumer train for a long time (actually part of the reason the train derailed). The world is changing and it appears this train will have a new driver of eastern descent.
ETF for the emerging Asian Train Ride
SPDR S&P Emerging Asia and Pacific (ticker GMF) will give you wide exposure to this category. Holdings are in China, India, Taiwan, Indonesia, Phillipines, Malaysia, and Thailand. The fund is up over 33% ytd and is well above both the 50 day EMA and 200 day EMA.
Disclosure Statement: ETFGPS is a blog that Navigates The World of ETFs. Sustainable Investment Strategies LLC is a Registered Investment Adviser in the State of Maryland, and may hold positions in the ETF(s) listed above. Investors who are interested in money management services may visit the Sustainable Investment Strategies LLC web site.
