The U.S. economy, led by rising exports and domestic investment, will avoid a Japan-style “lost decade” to emerge strengthened this year, Jim O’Neill, chairman of Goldman Sachs Group Inc.’s asset-management business, recently wrote in the Financial Times.
Improvements in the U.S. savings rate following the credit crisis of late 2008 and 2009, favorable demographics and high productivity mean the U.S. may “at some stage” return to a growth trend of “close to 3 percent,” he wrote in the opinion piece.
The “decisiveness” of U.S. central bankers, policy makers and politicians in providing monetary and fiscal stimulus together with commitments to long-term fiscal improvements has “given business that further lift that was necessary,” he wrote.
Along with the BRIC nations, which comprise Brazil, Russia, India and China, and the next largest 11 countries such as Indonesia, Turkey and South Korea, the U.S. will help drive and share in the benefits of world growth, wrote O’Neill, who coined the acronym “BRIC.”
U.S. equities will outperform so-called emerging markets for part of the year as the dollar strengthens against most currencies, with the Chinese yuan being one exception, he said. U.S. Treasurys will weaken, he said.
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