Avid golf fans watched in amazement as Tiger Woods lost his lead for the first time in 36 events to South Korean native, and current Southlake Texas resident, Y.E. Yang, marking the first time an Asian native has won an American major golf championship.
This morning we wake to a market pullback started from and Asian sell off. A lighter than expected economic report from Japan started the pullback. The new world economy is much larger, tied directly to each other, and therefore co-dependant.
The last several years of global economic movement, has in our opinion, firmly established the size of global trade and therefore correlation to others faltering. As the world outsources trade to the most cost effective producer of goods and services, each country outsourcing services becomes a slight slave to anther’s economy.
Is co-dependency a bad thing?
In our opinion, no, but it is a new awakening Americans must get used to. For as long as most of us can remember, the US has been the leader in economic development and growth. Our country is aging and has become a more servicing economy, rather than a producing. Other countries, such as Asia and developing countries now have greater importance on the world economy and will have an impact on capital markets.
We are certainly not calling the end to US dominance or importance moving into the future. We do want investors to understand that the world economies will gain, lose, and hiccup more in sync in the future. After all, the latest economic recession was caused by the US.
In the future many Americans may be surprised as co-dependency leads to the possibility of a foreign country led recession. This is not a bad thing, just worth noting, especially in the future. JK