The global middle class will soon count 50% of the global population, and the rest will be directly supported by them by remittances home. Everywhere we will be seeing a steady unrelenting improvement in living standards that is continuing to accelerate.
For those who have worked through the logic of sea ice melting, you will recognize the same very nonlinear phenomena. I have had the advantage of knowing that the world we are living in could happen thirty years ago. The S curve is well known and a powerful predictive tool. But I could not anticipate the enthusiastic conversion of the Chinese and the Indians to economic and governmental sanity.
Today, the footdraggers remaining around the world are simply temporary speed bumps. Does anyone not believe that the day Cuba is able to normalize its place in the world, that it will quickly emerge as the most dynamic country in the Caribbean? And let us not forget that Brazil has fully embraced the modern economic system and is now showing dynamic growth.
That was not who really got to play. The fact is that the salesmen mortgaged the fence posts in order to get commissions as they always will if you let them. It remains that the real bag holders are large institutions who will now have to absorb massive losses unwound over the next several years.
After all, if you walk away from a $500,000 mortgage, with no money down, and get a good job, chances are you will be able to buy the same property for $200,000 in a couple of years with a $50,000 down stroke. You are on the winning side of a $500,000 swing if you include unpaid interest. Guess who paid?
While the US economy is once again sorting itself out, the problem with oil is not going away. The Global growth machine is eying a global middle class that wants to share in the luxury of owning a car. The real projected demand for oil based fuels is insatiable and will need to be redistributed through the market place. I have already warned of the advent of $200 plus fill-ups. You and I have to be able to say ouch!
And that level of pain will herald the rapid advent of biodiesel in particular, hopefully by way of an algae culture.
This means that young middle America gets to buy their home at a fair economic price and to keep fit by riding their bicycle to work. This is not a bad deal for the children of the baby boomers.