Principal Global Investors has released their "The Put and The Pendulum," a 2016 Economic Outlook, that was written by their very own global chief economist Bob Baur.
"While 2015 has witnessed a rebalancing of growth, we can expect that in 2016 developed economies will continue to improve and become more competitive," stated Baur.
According to the press release of Principal Global Investors in Business Wire, Baur outlined the top trends/factors that are affecting the 2016 global market.
China and emerging markets: China's economic engagement with important emerging markets has started to waver.
Surging commodity prices: Surging prices of commodities and merchandise are starting to lose momentum due to the investment boom in China and an increased supply of commodities.
Non-U.S. labor-pricing power: The pendulum is now swinging away from low-cost labor providers like China.
The U.S. Credit super-cycle: Following the Financial Crisis, there is a movement away from U.S. fast-spending, credit-driven growth, and home-equity borrowing.
Equities likely have more upside than bonds in 2016: However, the best returns may be in real estate.
The 'Greenspan Put': The Federal Reserve's use of the federal funds rate to spur the U.S. economy may be losing its effectiveness.
In his paper entitled "The Put and The Pendulum," Baur made use of the famous Pendulum in Portland, Oregon, as a basis in examining the trends and factors that might have a great impact in the global economy of 2016.
"Newtonian physics and economics are vastly different in their predictive abilities. Indeed, physics has the advantage of being accurate; the forces that drive the pendulum are defined and predictable. Yet, the forces driving economic 'pendulums' are indefinite, vastly harder to predict," explains Baur. "Think of Principia as we examine the forces impacting the 2016 global economy. One can't know the end point to which those forces will take us, but we may know the direction!"
