Growth, gas and chicken ranches.........

The economic news from the US seems a lot brighter than ours, and I was interested to see that the housing market is on the up. Hopefully this applies to Houston.

 

I have been keeping a finger on US energy matters for about 4 years, and it now looks as if bonanza time is just around the corner. What I had not quite foreseen was the astonishing impact on previously moribund industry. Cheap gas (as I previously mentioned, about a third of European prices) is reviving iron and steel making, chemicals, pharma, plastics etc. to the extent that European plants can’t compete, and businesses are relocating back from China where, as I predicted a couple of years ago, massive increases in labour costs are killing competitiveness. If Mr Chin didn’t fiddle his exchange rate, China would be in deep poo.

 

What is really happening here is anybody’s guess. We are told that we are out of double-dip recession. Great news except that I don’t believe we were ever in one. The Office of National Statistics figures are all over the place. The latest is that we have an annualised GDP growth rate of 4%, which is pre-crisis performance amounting almost to a boom. This is the fastest quarterly growth in the last 5 years. Unemployment is falling, as is public sector borrowing, and pay is rising.

 

Never mind the doomsters. Retail sales are on the up. New car purchases increased by about 7% in the past year, job-creation in the private sector   has been surprisingly massive, far off-setting cuts in our bloated public sector, there are more people in employment than ever before.

 

And there is one infallible measure of things getting better. That is when assorted academics, economists and gobby lefties tell us how bad things are going to be unless we do a U-turn back to the days of borrow-and-spend.

 

A friend expert in these things always reckons that the best investments are in sin, and therefore you should out your money into alcohol shares, tobacco stock etc. Well, part of our growth is down to the incredible growth of on-line gambling here, with firms like Poker Stars making a bundle.

 

Apropos which I remember years ago that Barclays – I think it was – bought into what they thought was a highly-profitable agricultural business in the US. Nobody told them that a ‘chicken ranch’ in Nevada has nothing to do with fresh eggs. They made a lot of money, though.