Economic Optimism - Big Picture

Just like in our personal lives it is important to keep perspective during the difficult patches. Regarding the economy it's important to look at the long term trends to see both the present economic reality and to see the future possibilities for world economic growth.

Below are just some examples of the significant growth of different countries economies over time. So while any snapshot in time may be less optimistic the overall trend remains positive and supports a point of view of optimism for the growth of wealth in the world.

Russia
Russia's economy grew nearly five-fold, from about 7 trillion rubles in 2000 to almost 33 trillion rubles in the last eight years. The country is basking in a boom fuelled by high oil and natural gas prices

Ireland
When Ireland first joined the EU in 1973, per capita GDP stood at just 63% of the EU average. By 2002, the nation had made such huge strides that it actually ranked among the richest countries in the EU, sporting a GDP of about 120% of the EU average.

United States
In the 20th century, the real standard of living in the United States went up seven for one.

Eastern Europe
On May 1, 2004 European re-unification became a reality when 10 countries in all, 8 from central and eastern Europe, joined the European Union (EU). Latvia, Estonia, the Czech Republic, Slovakia, Slovenia, Poland, Hungary and Lithuania all formally joined the EU on that date. On top of this, two additional members, Romania and Bulgaria, are scheduled to join the Union in May, 2007.
On average, the new Member States posted GDP growth of +3.7% in 2003, a whopping ten times the pace logged for the rest of the EU. In some smaller countries that have seen particularly high foreign investment, the growth rate is even higher.

India
It is one of the fastest growing economy in the world. Indian Economy experienced a GDP growth of 9.0 percent during 2005-06 to 9.4 percent during 2006-07. By 2025 the India's economy is projected to be about 60 per cent the size of the US economy. The transformation into a tri-polar economy will be complete by 2035, with the Indian economy only a little smaller than the US economy but larger than that of Western Europe. By 2035, India is likely to be a larger growth driver than the six largest countries in the EU, though its impact will be a little over half that of the US.
India, which is now the fourth largest economy in terms of purchasing power parity, will overtake Japan and become third major economic power within 10 years.

Economic Optimism - Glass is 3/4's Full

Warren Buffett: U.S. on Right Track Long-Term

As dark as things might look now, the U.S. is on the right track long-term, says billionaire investor Warren Buffett.

"My children will live better than I did, and my grandchildren even better," says the world's third-richest man and its most famous investor in an hour-long interview recently on CNBC.

"In the 20th century, the real standard of living in the United States went up seven for one. A great many of the factors that went into producing that really unprecedented gain in how people live ... are still present.

"We have a market system, we have a meritocracy, we have the rule of law.”

“None of them are perfect, but they have combined in the past to move one generation after another ahead of the one that preceded them. That will continue to be the case."

Ranks of Rich Swelled World Wide

If you're committed to producing success, financial independence and wealth in your life this is good news and if you're not then it's not.....

By Daniel Thomas in London
Published: April 20 2008

The ranks of the world’s rich swelled to 8m during 2007 as the wealthy proved immune to the strains across global economies in the latter half of the year.

There was a 4.5 per cent increase last year in so-called “high net worth individuals”, those with investable assets of more than $1m excluding primary residence, according to the 2008 wealth report compiled by Citi Private Bank and Knight Frank, published on Monday.

There was particularly strong growth of wealthy populations in the emerging economies of China and India, as well as those countries that have access to natural resources such as Kazakhstan.

Countries such as Brazil, Canada, Australia and Russia also each added more than 8,500 wealthy residents in 2007 on the back of the commodity boom.

The report says that the rate of growth of high net worth individuals has outpaced growth in both gross domestic product, and GDP per head, which it believes indicates that the rich are getting richer relative to their respective countries.

“This is not a perfect measure of relative wealth growth across income levels,” it says, “but there is an indication here that the plutonomy model retained its strength through 2007 and is in rude health.”

The US is still home to most of the world’s truly rich. High net worth individuals make up 1 per cent of the US population, with 3.1m people claiming to be dollar millionaires, and 460 to be billionaires.

Japan claims the next highest population of the wealthy, with 765,000 dollar millionaires, and then the UK, where there are 557,000.

The UK has seen the biggest increase in billionaires, however. Numbers rose by 40 per cent in 2007, from 35 to 49. China’s high net worth population grew by 14 per cent in 2007, and now number 373,000, almost as many as in Germany.

The report says there was little change in the investment activity of the very rich during the credit crunch in 2007, other than a shift away from structured finance. It says the very wealthy are “weathering the crunch” much better than insti tutional investors, owing to the diversity of their port folios.

More than 50 per cent invest in property, which has fuelled a rapid growth in luxury house prices across the world.

London retains its spot as the world’s most expensive place to live, followed by the tax exile haven Monaco and millionaires’ playground St-Jean-Cap-Ferrat.

There were the first signs of trouble in paradise last year, however, with prime property in certain areas in Ireland and the US showing a fall in price. The report’s authors warned that there were likely to be further falls this year as the economic slowdown caught up with the world’s super-rich.

Copyright The Financial Times Limited 2008

What's very interesting is how it is also happening in Asia, Europe, Brazil and other areas of the world. Also see the video below (TED) on ending poverty......

What I'm Reading - Books

Books I'm reading:

Rules for Renegades - Christine Comaford-Lynch (Entrepreneurship)
The Middle-Class Millionaire - Russ Allan Prince and Lewis Schiff (Entrepreneurship)
Old Friend From Far Away - Natalie Goldberg (Writing)
The Greatness Guide - Robin Sharma (Leadership) reading for 2nd time

Reviews will follow.....

Book Review - The Pope's Children

I picked this book up prior to my 1st trip to Ireland and just finished it on my return. If you are interested in business, economics, culture,history or just want to expand your world I recommend you read this book. This is a thought provoking, funny, entertaining and educational book all wrapped into one. The book shows how Ireland has arrived and become a global nation. Ireland is now one of the richest nations in the world with the largest middle class.

My trip allowed me to see everything from the old rural Ireland on the west to the industrial north to the cosmopolitan Ireland in Dublin. The Pope's Children complimented my trip and opened my eyes to the new Ireland and the new Irish Dream.

Be prepared to learn a bunch of Irish words like craic (fun), as Gailge (in Irish), and failte (welcome) and also a bunch of fascinating terms and descriptions created by the writer including Expectocracy, Stakhanvite, Commentariat, Kells Angels, Deckland and many more. Reading the book in a lot of craic.

What's the most important theme of the book is the amazing economic progress Ireland has made in 10-15 years. Ireland has went from a nation that exported it's young to a nation that the young are moving back and it's an immigration magnet to Eastern Europe. It's a fascinating story of the good, bad and ugly of economic progress but it take a positive and optimistic view of the progress Ireland has made.

The book is the #1 best seller in Ireland but it's a book that will be enjoyed by everyone. Check it out.