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.