Economic data is improving in the U.S., deteriorating in Europe, and a bit mixed in China.Meanwhile, the stock markets are staging a huge rally.
Last week, Goldman Sachs economist Jim O’Neill gave a presentation at the prestigious Ambrosetti Financial Markets Workshop. He updated its attendees on how he sees the world, and he outlined some of the issues that concerned him.
One issue was the evolving make-up of the German exports (slide 37).
“I repeated a remark I often make that on current trends, by 2020 Germany would rather be in a monetary union with China than with France,” said O’Neill
Indeed, China was another hot topic in his presentation.
“Probably the most important slide of the presentation is page 8 which shows global and regional GDP since 1980, and what we are assuming for this decade,” he said. “As I pointed out in Cernobbio, China growing at 7.5% is essentially equivalent to the US growing at 3.75%, given China is now $8.2 trillion in size.”
O’Neill believes China is an “underhyped” story.
His entire presentation gives an excellent and comprehensive view of the world. And it’s worth reviewing closely.
NOTE: Thanks to Goldman Sachs Asset Management for giving us permission to feature this presentation.
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