The banners may be flying on Wall Street but the US faces a rocky ride over spending cuts before regaining its feet. Photo: Getty Images <\/p>\n
THE most common question I get asked is how the world will pan out once we get through the current mess? Futurism is a dubious occupation but a task we all like to dabble in. When it comes to sharemarkets, the best approach is to go region-by-region identifying the key dynamics. <\/p>\n
The United States is still the largest and most critical global sharemarket. <\/p>\n
There can be no new bull market without America leading the charge and I am confident it will find its feet again and retain world leadership. <\/p>\n
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In the short term, the US is in for a rocky ride, dealing with the looming $750 billion reduction in government stimulus. Coined the ''fiscal cliff'', this involves the end to a series of tax breaks and the start of savage spending cuts that are due to kick in early next year. Economists forecast this could deduct a staggering 3 to 5 per cent off economic growth. <\/p>\n
Avoiding this would seem difficult given the political divide and the approaching presidential election. <\/p>\n
If nothing is resolved by August, this could trigger another wave of selling on the sharemarket. <\/p>\n
No doubt the Federal Reserve and its captain Ben Bernanke will be ready to counter with more cash manufacturing, all making for a bumpy ride through until December. <\/p>\n
Beyond 2012, it is easier to build a more bullish case for the US. <\/p>\n<\/p>\n
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Green flag ahead once past this mess<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" The banners may be flying on Wall Street but the US faces a rocky ride over spending cuts before regaining its feet. Photo: Getty Images THE most common question I get asked is how the world will pan out once we get through the current mess? Futurism is a dubious occupation but a task we all like to dabble in. Continue reading