GWE (Global Wealth Effect) In My View-Part-3

CANADA- Somehow the Global wealth effect had not left its strong effect on Canada.That does not mean that Canada did not get some of it. Growth of Canada was planned and basically because of internal wealth(Canada's natural resources industries) like oil reserves in Alberta and McMurra.The targeted customer for Canadian oil and gas, is its neighbor country US. The wealth effect was there(2003 to 2007) and it will continue to stay long but its not from global wealth.

South Africa-The economic downturn is slow. In past 17 years South Africa saw this rescission. Mining was one of the caused for South Africa's booming economy and also for economic downturn. Rising employment and wealth effect due to high asset prices leads to:

Strong business confidence-->Leads to--> High commodity prices -->Supports-->Private Investment.

However South Africa survived the rescission because commodity price, raised by 5.5% in the 2nd quarter(2009).

South Africa's government committed to spend $98 billion Dollar on Infrastructure over the next 3 years (not bad). Analyst are assuming that this country economy will shrink only 1% in 2009 and will grow slowly in 2010.

Global Wealth Effect (GWE) In My View-Part-3

Dubai-The city enjoyed most of GWE (Global Wealth Effect) in past years. The lifestyle was rich (I can say rich enough that people were thinking they were in a drug). It was a dreamland, for Investors. Money was like a low hanging fruit in Dubai. In every Six month there was a new big project. Stadium, amusement parks, shopping center and off-scale apartment complex (you name it) are the example of how Dubai get the most out of Global Wealth Effect.

There was even shortage of worker for the on-going projects. So most of Dubai employer get workers from outside the country by providing work permit. Workers from Bangladesh rushed to Dubai to get the gold(jobs with very good wages), promised by their employer. Life was more than perfect for last 4 to 5 years started from around 2001 to 2006.

Now in Dubai, the life is back to below normal. Some apartments homes that once traded for five million dollar have dropped to two million dollars. Still no one is interested for buying. Foreign workers are sitting without work. They are trapped in between the fight of their employer and Dubai government's new rules. Investors are pulling back their money to just survive before hits by a monstrous storm(current economic downturn) which they even don't know how monstrous.

A favorite quote of Mr. Warren Buffett is

Only when the tide goes out do you discover who's been swimming naked

.

This is so true.

Continuing...