BRICs | Barataria - The work of Erik Hare

The big story of the last 20 years has been a tale of two worlds coming together. While the developed world experienced a decade of growth in the 1990s followed by stagnation and decline in the 2000s, the developing world saw nothing but growth. The two phenomena are related in the tremendous expansion of credit and general money supply over this time, and are now starting to come together. The developing world is feeling the pinch the same as the developed world.

This story first appeared in Barataria back in September 2012, but it’s now quite fashionable to talk of the end of the great boom in “Emerging Markets” (EM). They have, simply, started to either mature or fall back. And investors are trying to find the next wave of fantastic growth stories to invest in.

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One of the great features of this global economic slowdown, which I call a Depression, is that it has not been genuinely global. The developed world – US, Europe, UK, and Japan – have been mired in slow growth and dogged unemployment for at least four years. While Europe enjoyed a small boom when the Euro took hold in the 2000s, much of it was fueled by government debt. The US has not performed well since 9/11 despite an ocean of red ink from Washington. But the BRIC nations – Brasil, Russia, India, and China – have enjoyed reasonable growth and a net improvement in resilience and stability.

Until now, that is. The slowdown is finally hitting everyone. What this might mean is very hard to tell.

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