Sorry America, the play isn't directed solely by you anymore.

I hope you have all been celebrating Beltane, and that you all honoured your mothers on Sunday. Tradition cops a lot of flack, but I think it's important and can have a good influence upon a person.

Anyway, back to today's post. In recent times whenever anything happened to the North American economy, the entire world held its breath. As the Earth's largest economy, this was a pretty understandable reaction. The recent NINJA loan crisis (No Income No Job or Assets) in the US, and the subsequent harsh slowing down of the economy, has had the same effect. People are scrambling everywhere like headless chooks looking under park benches for the end of the world.

I agree...it does, in my opinion, signal the end of the world..........as we know it. A world where the US economy could cause a worldwide recession with big hits to consumer confidence like those seen recently. A world where everyone else cowers in fear until it recovers.

You see, in the past, the USA was the largest consumer of goods in the world. Many countries largely relied on income from exports to this monster. These days though, the dynamic has changed slightly. How? Read on.

China has emerged as a gigantic consumer in its own right, as we have seen in their thirst for Australian resources (and those of other nations). In fact, China now accounts for 25-30% of world demand. In ten years, this figure doubled. It isn't gathering all these resources for simple production followed by export though, it is building vast, vast amounts of infrastructure to deal with domestic urbanisation. If a tier 1 city is Beijing, and a teir 3 Brisbane, China is tipped to go from 45 teir 1-3 cities in 2006, to 86 in 2010, and a massive projected 147 teir 1-3 cities in 2020. In population terms, we are talking urban populations increasing from 532 million in 2006, to 970 million in 2020. These are enormous numbers, and the consumption figures would be absolutely astronomical.

The moral is that China will start to exert more of an effect upon world economies, and external fluctuations in demand will affect the Chinese economy less. The parallel rise of India will also snip a few more puppet strings from the US economy.

As a rather interesting side note, the Middle-East currently has more infrastructure projects planned than both China and India...COMBINED. Surprised much? What has been the biggest criticism you have heard ad nauseum concerning Middle-Eastern economies?

"they're so dependent on oil, if the price drops, they're doomed."

Actually, not really. The Middle-East is not just one market. It is 13 markets spread out over a space that takes eight hours to fly over. And not all these places are driven by oil. In reality oil only accounts for 3% of Dubai's GDP. And it's going to be completely oil dry in the next two decades.

So the message is, don't stress, the US isn't the great global indicator for market performance that it once was, and will become less so in the years to come.

Dubai skyline at the moment...and the construction below. This kind of growth can also be seen in China and India currently.