How did the rest of the world's growth get better, and what makes people think that nothing's changed?
First, I believe that many countries have no desire to say that things are better, because that wouldn't jive with the easy money policies that many central banks have, because they want to keep their currencies low to take advantage of the American market.
That's right, they want to use the so-called greatness of globalization to steal share, because they think it's pretty much their birthright. The easiest way to grow is to price your goods under ours and then sell more into our market than you would otherwise.
But a funny thing happened to easy money. It's igniting the home market countries and making their below market rates a big fat joke. Take Europe. Germany, which had been stagnant, is now starting to see a big pick-up in growth. I think that's in large part because this country has no choice. It admitted more than a million refugees and when a country does that, it has to spend more to grow its economy. The government is tight-fisted and afraid of hyperinflation, but it is also not about to take in a million people and have them starve. It's feeding them, clothing them and trying to provide work for them. That expands the economy.
Lower rates have helped stimulate the Spanish economy, too. It's why I think that Banco Santander (SAN) is such an interesting speculation. We are seeing a slight turn in Italy, not enough yet, but they are finally working out their solvency issues with their banks and that could get that surprisingly mostly cash economy moving a bit.
The biggest surprise is how strong Britain is. I know that there could come a day when Brexit hurts, but the consumer is spending and construction remains strong.
Russia's turned because oil came back up from where it was and the ruble is linked to oil. It's not back all the way and the sanctions still hurt, but remember we are not talking about robust growth here, just growth that's better that it was.
The receipts from Visa's (V) European business certainly confirm all of this growth.
India's demonetization has already started producing an economy that's generating more credit and could grow faster after a quick hit down. The fact that Visa's CEO Al Kelly said that tens of thousands of people are applying for Visa cards every day in India is pretty telling.
China's tough. If we look at the Baltic Freight index, it has slipped pretty terribly. But if we listen to Cummins (CMI) and Caterpillar (CAT) and Boeing (BA) , we feel pretty good about that economy's capital goods spending. When you listen to the Macau casino numbers of late or you check the receipts of the U.S. retailers in China, from Coach (COH) to Action Alerts PLUS charity portfolio holding Apple (AAPL) to Nike (NKE) to Starbucks (SBUX) , you can only feel good about the situation.
We are getting nascent signs of a revival in Japan, again confirmed by Visa receipts, which, as far as I am concerned, are the best data available.
I know Mexico seems like a failed state these days, but most of the companies I deal with year over year say business is much better in part because employment is very strong for many of the reasons President Trump rails against.
Latin America, away from Venezuela, which is a truly failed state, is making a very nice comeback, with Argentina and Colombia leading the way. Brazil's still an issue ex agriculture, but I bet later in this year we will be thinking much more positively about the country.
That's a lot of growth from a lot of places. It may be under-recognized, but it is indisputable unless you are a central banker that wants to keep his currency cheaper than it should be. At this point it's a rising tide, and if you disagree I think you're fighting current events and soon you will be fighting history.