Readers will know that we have a very bullish outlook for the economic recovery this year. Indeed, we see the US at Chinese-style growth rates for the next year before coming off. The reasons for this are:
- An ongoing global inventory cycle in goods production that has American wholesalers and retailers short of stock.
- A very strong property and stock market delivering huge gains to household wealth.
- Recent falls in the US dollar.
- Immense fiscal stimulus that has built a war chest of household savings and will move next towards direct public investment.
- A successful vaccine rollout based around the best available (as opposed to Australia) unleashing all this potential energy.
- And, a rare profits boom as the resulting topline growth lands upon pandemic cost-out.
Here are some new charts to help illustrate the point. Via Oxford, overall recovery is beginning to accelerate:
As science puts the virus to the sword:
In part, courtesy of the vaccine rollout:
Which is in the process of dramatically accelerating:
Notice that the US is not using much of the Astra Zeneca vaccine owing to the three alternatives being materially more effective:
This is one reason to see the lockdown-addicted Australian rebound underperforming versus the US this year.