The world feels more precarious to me today than it has in a long time; it's feels like a ticking time bomb. Perhaps it's just me, but everywhere I look, I see significant risks on the economic and political landscape. These thoughts are based on personal experiences over the past three months.
Less than three months ago, for instance, I flew from Singapore to Hong Kong, flying directly over the South China Sea. At one point I saw the Chinese "islands" that are the source of so much controversy these days. Just last week, US Secretary of Defense Ash Carter flew onto a US aircraft carrier as it transited through the disputed waters. The Chinese reaction was swift and blunt: the official China Xinhua News agency called America "an irrelevant party" and noted US attempts to create fanfare in the South China Sea "might backfire." Uh oh. Worth watching.
I then spent some time in Canada in August, where everything from housing markets to labor conditions felt very shaky. Regular readers of my writing will recall my piece entitled "Crazy Canadian Credit Confronts Crude, Eh?" in which I suggested a housing correction might be imminent. Well, late last month Canada's largest mortgage insurance company warned that 11 of 15 major Canadian centers have overvalued markets and the OECD noted the Canadian housing market is at risk for a "sharp correction." It seems underway. Not good.
Last month I had a board meeting in Capetown and had a chance to observe the South African economy first hand. Its outlook is grim. Consider the following facts about the labor market: the unemployment rate for those under 24 years of age is a staggering 52%, but if you expand the rate to include the underemployed, the rate jumps to ~65%. And although it's most severe among the youth, underemployment is over 40% for those between 25 and 34 years old. Doesn't exactly seem like a recipe for stability.
And just a few days ago, I was in Nashville to give a talk. What I saw was stunning. The city is booming. The Wednesday night restaurant scene was hopping and had a youthful, energetic buzz. Cranes were everywhere, and the Nashville Business Journal even has a "Crane Watch" website to monitor the over 100 projects underway. Sure seems like the benefits of quantitative easing have made their way to Music City; what's going to happen when the music stops?
I'll continue to comment on developments I find interesting and noteworthy. In addition to posting my thoughts every Wednesday on my website, I have also begun posting them to LinkedIn, Facebook, and Twitter. Listed below are links to my most recent comments. As always, I'd appreciate feedback!
Water Wars Coming?
Water stress is beginning to rear its ugly head; one impact may be armed conflict as nations struggle to secure adequate water for agriculture and other basic needs. How will this dynamic play out? What's next? Click HERE for my note.
Going Green, Collapsing Citrus
The citrus industry in Florida is on the verge of a complete collapse. Why's that? Citrus greening disease is spreading rapidly and it can't be stopped. What's next for Florida? Click HERE for my thoughts.
The largest Caribbean island is on the verge of entering the global economy. What opportunities might it present? Are there risks? Click HERE for my piece.
In this fun note written on Back to the Future Day, I recount the experience of watching a movie on cable TV with my family. The frustrations of commercials domineered our experience. Click HERE for more.
Insatiable Battery Power Demand
The seeming unstoppable demand for portable power, driven by smartphones and tablets, is combining with the surge in all electric vehicles to support a spectacular outlook for the lithium industry. Might lithium re-power Latin America? Click HERE to read my note.
Forget Your Plans...
There's a fundamental difference between having a plan and planning. In this note, I discuss the power of planning and its usefulness while suggesting that plans are less helpful. Click HERE for my comment.