A Short List of New Trends

I will try to keep this short, sweet, and therefore highly informed by subconscious perception.

Germany is the new, unstoppable economic leader of Europe. Harbingers: Michael Lewis envious shit article in Vanity Fair, hand-wringing by France and United Kingdom over the 1990 unification, Germany's low unemployment despite Europe's fragile economics in 2011, Poland's and Russia's stated interest in seeing Germany continue to lead, Greece's need for German cash handouts to fill in their deficits*, and of course the burgeoning of articles like this one where the authors point out Germany's recent economic success.

China's undeclared global cyber war is about to become reciprocal. U.S. government and industry leaders, both Republican and Democrat, civil and military, are in 100% agreement about the need to stop deep infiltration of U.S. information technology infrastructure by China state-sponsored hacking. This rare unanimous agreement will make for some very interesting counterattacks. Side effect: sales of computer parts made in countries other than China will increase at the expense of China-made parts; or prices of China-made parts will decrease.

The U.S. economy is poised for a surprising upturn. Growth in tax receipts is above reported income growth, indicating that strong retail sales are not coming at the expense of savings. EU angst over Greek, Italian, Spanish, and even French deficits, sovereign credit ratings, and the resulting spikes in sovereign borrowing rates has cast a pall over the world economy for much of 2011, holding U.S. growth back as well. Despite this and the lingering issues from the bursting of the housing bubble and consequential banking crises in 2008 and 2009, negative forces are being used up. U.S. corporate cash hordes are the largest they have ever been. Even a small increase in capital spending by U.S. business would result in an economic resurgence.

U.S. manufacturing growth will begin to come at the expense of China. Already there are small signs of manufacturing coming back to the U.S. As wage inflation in China and "probity loss" weighs on the China cost advantage, some kinds of manufacturing will become more efficient in the U.S. than China. The waves and waves of consumer products from China are widely perceived as sold by Wal-Mart, made of cheap plastic, and don't last. In contrast, the consumer product reputations of U.S., Japan, and German-made products is top-notch. Consumers have experienced austerity in 2009-2011 and want to spend precious dollars on products that last. They are willing to skip cheap "plasticky" products that have been proven to contain poor quality control and design.