FedEx CEO Fred Smith says the economy is stronger than most people realize, and that mountains of cash is "on the sidelines" in emerging markets, waiting to be invested.
Asked in an interview what it would take to turn around the U.S. economy as the credit crisis unfolds, Smith, who founded the global freight carrier, said things in the real economy are not that bad.
"The industrial economy is a lot stronger and more resilient than I think people give it credit for," Smith told Fortune.
"And there's an enormous amount of money in China, in the Middle East, and elsewhere that has to be invested. It can't just be placid on the sidelines. So after a period of trauma and readjustment, my guess is that the economy will come around."
Smith supports his view in part using the flow of data — economic data, fuel costs, and the like — he sees at the helm of his freight giant. FedEx employs 290,000 people and operates in 220 countries.
"They're showing pretty clearly that the economies of the industrialized world are slow, and that the emerging economies, like China and India and the intra-Asia trade, all continue to grow at pretty good levels but at substantially lower growth rates than was the case a few months or years ago."
Meanwhile, followers of the Dow Theory hold that weakness in shipping, the very industry FedEx represents, shows that there's more pain ahead for the economy, and thus for the big manufacturing stocks that make up the Dow 30.
"People are anticipating that if the economy is slowing down, people are going to be shipping less,'' Blake Howells, who helps oversee $2 billion at Portland, Oregon-based Becker Capital Management told Bloomberg News.
"That would indicate that the market anticipates that the economy is going to slow."
© 2017 Newsmax. All rights reserved.