The entire global economy went into a tail spin in the last two years, and the origin was from US. The Lehman Brothers inc., collapse in the middle of 2008 triggered the global fall and pushed the US economy into record budget deficit.
The year 2009 was very bad for US with the economy as a whole recording a negative GDP growth, and jobless rate hitting 10% level. There were also over 135 bank closures during the year.
Not many analysts are ready to bet on US for the year 2010, but we feel that the year 2010 could well belong to US for the following reasons :
- US had a 5.7% GDP growth in the 2009 fourth quarter, which it might improve upon in the first two quarters.
– 92% of the US employers are committed to hire more people, which means that the unemployment problem will start easing out quicker than expecte.
- The interest rate cycle might start hardening from the first quarter end, which could force over 50% of the fence sitters to commit their spending on home buying and other big ticket purchases.
- US dollar has weakened against all major currencies, which is set to help US record higher exports and lower imports. So expect the trade deficit to narrow down drastically.
- The weapon sales of US is also set to record high in 2010 as regional level conflicts are set to rise. Taiwan, Iran, South Korea, Pakistan regions are the key markets.
- US housing market may see a revival in demand from the middle of 2010, which could help shore up the finances of Fannie Mae and Freddie Mac. That could help US government make decent money out of the huge share holding it has in these poorly managed companies.
- US technology dominance might once again revive as other countries reduce their research spending drastically.
So there are enough chances for the US to make 2010 a spectacular year.