Rumors of America's decline are greatly exaggerated

This morning I was greeted by this headline article on Market Watch, IMF bombshell: Age of America nears end.

The problem, of course, is that this is not what the IMF said at all. It is based upon GDP, which is hardly the sole barometer of what governs a country's financial prowess. As noted in this space previously, and particularly as someone whose operations are nearly entirely based in Greater China, I can tell you candidly that China is in no position to overtake the United States economically within the next 5 years let alone the next 15.

China is plagued by an enormous real estate bubble, a lack of innovation and leadership, an aging populace that must be supported by an unequal distribution of younger workers, high unemployment in rural areas, a lack of social safety net and, perhaps most important of them all, a lack of consumption. Despite these GDP numbers, China is still an export-driven economy with no near-term plan to become one that consumes products.

So sleep well, U.S. citizens. China is much closer to being the next Japan than being the next Great Britain of the 1800's or United States of the 1900's. Of course, this does not guarantee the United States' position as world leader so long as the Federal Reserve continues debasing the currency. But I can assure you, the next successor will not be China.