It seems to me that a reasonable starting-out question is whether I expect the world in general to be expanding economically in the coming year or contracting.

My preliminary guess is that we’re going to be going sideways. Here’s why:

–we’re at the outset of the northern hemisphere winter, a typical period of strength for crude oil, as the heating fuel supply chain does its annual seasonal restocking. The oil price should be rising. But it’s not and OPEC is talking about reducing production in order to counteract the demand weakness. Some of this may be due to the fight against climate change, but I take it also as a sign that the developed world isn’t exactly lighting up the economic growth scoreboard

–Europe appears to be stagnating, with companies in the the largest country, Germany, talking about layoffs and restructurings. We’re approaching year nine since the Brexit vote and year five since the UK actually withdrew from the EU, and the UK still hasn’t come to grips with how horrible a mistake this was (as it watches company after company move headquarters (and stock listing) elsewhere). Arguably, Scandinavia and Ireland are the only bright spots

–Japan’s working population peaked about thirty years ago and has gone downhill since. So too its currency and its stock market. Maybe, like Europe, a source of special situations, but neither is going to be a locomotive of economic expansion

–Chinese premier Xi has been channeling his inner Mao for a considerable period of time, with the easily foreseeable (except apparently to Xi) economic disaster that this has created. Arguably, he has finally figured this out and the worst has passed. And there are a bunch of interesting multinational companies there–although Xi’s destruction of Hong Kong as an independent source of financial information has made investment in China riskier than it was under Deng.

–an investor might look at Singapore, Malaysia, Australia, or New Zealand, but none of these are big enough to move the world economic needle

–Africa, Latin America and the rest of Asia are the areas that will likely account for the lion’s share of the growth the world will have in 2025. Unfortunately, stock markets there I’ve found, generally speaking, to be opaque and not friendly to foreigners.

–this leaves the US.

…more tomorrow