Larry Edelson examines Asia's economies and the growth that certain countries have seen compared to the losses in the U.S. Mr. Edelson takes a closer look all the evidence backing Asia's strong economy and its future independence.
More than $423.4 billion in foreign investment has poured into Asia and Southeast Asia just in the past two years. So there's a huge amount of new money at risk. And if Asia is as dependent upon the U.S. as it has been in the past, then Asian economies and stock markets are going to get hit hard, which, in turn, will create a vicious downturn, pulling the U.S. indexes even lower.
Of the 11 major Asian and Southeast Asian economies:
- Eight have current account surpluses.
- Eight have more than $100 billion in reserves, with China having the largest in the world (currently $1.528 trillion).
- All of them except Japan are growing at a faster rate than the U.S., by factors ranging from two times U.S. economic growth to as much as 4.6 times in the case of China.
- With the exception of China, all have unpegged their currencies from the U.S. dollar and from fixed-rate currency regimes. As a result, their economies are more flexible.
- of this evidence points to an Asia that's not only economically stronger than it was just five or ten years ago, but also one that is far less dependent upon the U.S. than ever before. However, to think that Asian economies are 100% decoupled from the U.S. economy is foolish. Asia still accounts for more than 30% of U.S. imports, represents almost two thirds of the world's foreign currency reserves and receives more foreign investment from the U.S. than any other region. Exports to the U.S. are still important, but Asian economies have become more independent in recent years.
"Plus, there is no denying the psychology of economies and markets. Especially in an era of lightning fast communications via e-mail and the Internet, herding behavior can spread around global markets more rapidly than ever before. So in this sense, Asian markets are more connected to the U.S. markets than they previously were. As a result, a panic in the U.S. can easily set off a panic in Asian economies, regardless of their stronger fundamentals," Mr. Edelson states.
To read this issue online, please visit:
http://www.moneyandmarkets.com/Issues.aspx?Economic-and-Market-Relationships-Between-US-and-Asia
About Larry Edelson and Money and Markets
With nearly three decades of experience in precious metals and natural resources markets, Larry Edelson has played a pivotal role in training Weiss Research staff and in guiding Weiss Research's customers to prudent investments in the sector. His Real Wealth Report, Gold Trader Hotline and Energy Options Alert provide a continuing education on natural resource investments, with recommendations aiming for both profit and risk management. His team of technical analysts helps enhance the timing of investment recommendations with the aim of continually improving the performance results for investors.
Mr. Edelson is also a regular contributor to the daily e-letter, Money and Markets. Recognized as an expert in precious metals and natural resources, he is often called upon by the media for his investing views. Mr. Edelson has been featured on Bloomberg, Reuters, and CNBC as well as The New York Times, New York Sun, and Marketwatch.com
Mr. Edelson holds a B.A. degree from Columbia University.
Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.