Monday, June 6, 2011

Economics:  The Bullish Case for the U.S. Economy

But can we really win merely by staying ahead of Europe and Japan? So far the answer seems to be yes. People are invariably shocked when [BlackRock Chief Equity Strategist Bob] Doll tells them that in 1995 the U.S. produced roughly 25% of the world's goods and services and in 2010, after 15 years that included a tech bust, a terrorist attack and a housing bust that triggered a financial crisis, the U.S. was still producing that same 25% of global GDP.

How is this possible given the rapid rise of China and India? Mr. Doll says the increase in emerging markets' share of the world economy has come "at the expense of mostly Japan and a bit Europe. The U.S. has held its own, which I think is a statement of our ability to be productive in a tough world."

But an investor would still have more upside in developing countries than in the U.S., right? Mr. Doll says that if he were forced to lock up his money in one place for the next 10 or 20 years he would indeed select the developing world and specifically India over China.

For more, see The Bullish Case for the U.S. Economy by James Freeman, June 4, 2011 at WSJ.com.

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