U.S. can succeed in 2011 & Ben S. Bernanke rider Chinese Premier Wen Jiabao for advantage in the global economy.

U.S. can succeed in 2011, while regulators from the Federal Reserve, Ben S. Bernanke rider Chinese Premier Wen Jiabao for advantage in the global economy.

U.S. growth accelerates as the end of the year, economists, consumers and companies like General Electric Co. increasingly confident in the prospects of next year after President Barack Obama agreed tax relief to Republicans this month. Europe, meanwhile, is stuck in a morass of sovereign debt, while China and other emerging countries are fighting for a top run economically costly inflation.

"The new, new, new is normal for the USA that are looking in pretty good shape," said Jim O'Neill, head of Goldman Sachs London Asset Management.

That's the message for investors to take another look at home, O'Neill, who helps manage 823 billion U.S. dollars, said last week in a radio interview with Tom Keene. It is raising questions about the total allocation of capital among emerging markets and the U.S. called," said O'Neill, who popularized the investment in developing countries for coining the nickname BRIC Brazil, Russia, India and China.

Robert Doll, chief equity strategist at BlackRock Inc. in New York, agrees. He said the economy improves and the commitment to tax cuts Congress approved last week to strengthen the case of U.S. equity investors overweight in their portfolios.

Shares outperform

"The U.S. will continue beating the rest of the developed world" and "probably doing very well compared to most emerging markets too," said Doll, who helps manage about $ 3.4 trillion. 500 See Standard & Poor's to climb the "1350 area" at the end of 2011, compared to 1243.91 at 4 pm in New York on 17 December.

500 of Standard & Poor's U.S. stocks increased by 12 percent this year compared with declines in emerging markets like China and Brazil and higher profits in the MSCI World Index, which tracks the actions developed in the nation.

"The U.S. economy certainly has some momentum," said former Fed Chairman Alan Greenspan. "The unemployment rate begins to decline next year." Unemployment was at 9.8 percent in November, more than seven months.

U.S. executives Head of respondents in the fourth quarter by the Washington-based Business Roundtable were the optimists who have been in nearly five years. Jeffrey Immelt, CEO of Fairfield, Connecticut-based GE, called Obama's tax cut and its December 15 meeting with business leaders "true positive".

"Massive" stimulus

Even has long been in the U.S. economy are becoming more optimistic. Goldman Sachs Group Inc., chief U.S. economist Jan Hatzius raised its forecast for 2011 to 3.4 percent from 2 percent last month to consider the package of tax cuts and a recent series of economic statistics stronger than expected.

Mohamed El-Erian, chief executive of Pacific Investment Management Co. in Newport Beach, California, said the "massive" to encourage those responsible for U.S. policy are pumping into the economy will help it expand 3 percent to 3.5 percent in the fourth quarter of next year over the same period this year. Previously, he grew 2 percent to 2.5 percent.

El-Erian, a leading proponent of the "new normal" paradigm of slow-growing economy for a post-crisis U.S., remains skeptical that raising the speed can be maintained beyond 2011 unless the country is also working to improve long-term competitiveness and reduce its medium-term budget deficit.

"Crisis in the bond market"

There are limits to the amount of fiscal and monetary stimulus can be achieved, he said, pointing in particular to higher interest rates in the long run since Obama announced its 858 billion U.S. dollars of the commitment to reduce taxes with the Republicans. The yield of the note by 10-year Treasury was 3.33 percent, at 17:29, 17 December in New York, according to BGCantor Market Data, compared with 2.92 percent on Dec. 6.

"A crisis in the bond market is likely unless we do something about the budget deficit," Greenspan said.

Pimco sees euro zone growth of just 0.5 percent, to 0.75 percent next year, while the emerging world will slow inflation as its fight against the leaders, El-Erian said. The firm, which manages the largest bond fund, combined growth forecasts for China, India, Brazil and Mexico will slow to between 6.5 percent and 7.5 percent in 2011, from 8 percent to 9 percent this year.

Avalanche Money

The outlook for 2011 is shaping up as governments and central banks increasingly move away from the common position to be used to address the recent recession and begin working in their own interest, with gains of a country that can cause other losses.

Obama's final round of stimulus comes after a slowdown this summer, partly caused by rising imports, scared the Fed to embark on its second round of so-called quantitative easing to a plan to buy $ 600 000 million shares of long-term Treasury until June 2011.

The resulting flood of money is threatening to overheat the emerging markets and buoyant, even though export-oriented economies such as China resist letting their currencies rise in response. Their resilience is stoking demand for products and increase the cost of energy throughout the world, including U.S.

"All this liquidity is going to create is not going to re-grow the American economy is going to Asia and other emerging markets, where it is not wanted," said Nobel laureate Joseph Stiglitz, a professor of economics at Columbia University in New York, in Santiago on 10 December. "Unintentionally, QE2 is leading to a fragmentation of the global financial markets, because each country will take steps to protect themselves."

Fanning Inflation

Oil has risen 11 percent in price this year, gold hit a record $ 1432.50 an ounce on December 7 and copper are traded in an unprecedented move last week $ 9267.50.

These increases are stoking inflation in the developing world. November 5.1 percent annual gain in consumer prices in China was the highest since July 2008, and people are more concerned about rising costs at any time in the last decade, according to the country's central bank. Prices in Brazil rose 0.83 percent in November from the previous month, the highest since April 2005.

The MSCI Emerging Markets Index fell 0.4 percent to 1,110.89 by 9:25 am Singapore time today. The indicator ended the day at its lowest level in two weeks on December 16 on concern that inflation in China and Brazil will accelerate and reduce bank lending in emerging countries.

Higher rates

"All this suggests a further monetary tightening and the use of policy tools," said Gerard Lyons, chief economist at Standard Chartered Bank in London. Failure to control inflation in the East could mean that boomerangs back to the West as the increase in commodity prices combined with stagnant wages for inflicting more economic pain, said.

David Carbon, head of economic research and monetary DBS Bank in Singapore, predicts the 10 major central banks in Asia outside of Japan will raise rates 24 times in June after 21 increases in 2010, when "could and should have done more. " China raised its key rate by 25 basis points this year to 5.56 percent, South Korea increased by 50 basis points to 2.5 percent. Governments have also used the controls to curb capital inflows, Thailand to remove an exemption of 15 percent for foreign taxes on income from domestic bonds.

Many emerging countries, led by China, are reluctant to curb inflation by allowing their currencies to rise, for fear of derailing its export-oriented economies. The yuan ended 2010 less than 3 percent against the dollar at the beginning of the year, even after officials pledged in June to accept greater flexibility. The fire is coming from U.S. lawmakers, who want China to do more to boost domestic demand.

The seed of the euro area

The risk is 2011 "to see the continuation and possible deepening of the wars of the currency call and, in particular, an exacerbation of tensions between Beijing and Washington, bringing the risk of a broad wave of protectionist measures," said Alastair Newton, senior political analyst at Nomura International Plc in London.

Meanwhile, members of the euro area are disputes over how to share the burden of safeguarding its currency amid a sovereign debt crisis is forcing to adopt fiscal austerity depressing demand. The dispute has left the German Chancellor, Angela Merkel, trying to impose its economic model of fiscal prudence to their neighbors before coming to his rescue, while inland resisting demands to turn their economy away from exports .

'Main risk'

Merkel resisted for two months before his consent to help Greece and investors spooked by suggesting that cover part of the bailouts. Last week was discussed with the European Central Bank President Jean-Claude Trichet about the possibility of extending aid packages and Luxembourg Prime Minister Jean-Claude Juncker on the issue of a bond set.

Andrew Popper, chief investment officer at SG Hambros Bank Ltd., the region identified as the "main risk" to the global recovery and the market in 2011. Greece and Ireland and were rescued by neighbors and the International Monetary Fund this year and investors are now focusing their sights on Portugal, economies across the continent cut budgets to placate investors worried about too much exercise.

"Policy makers will keep running in the other," said Stephen King, chief economist at HSBC Holdings Plc in London and a former Treasury official in the UK. The result is a "very troubled, very uncertain" in the world.

Much of the tension arising from U.S. efforts to pump the growth and reactions to the measures in other parts of the world economy, according to El-Erian.

"The basic premise is that you will see more of the same in the U.S. unless the rest of the system pushes hard," he said.