The Age of Turbulence

I have just started Alan Greenspan's new book, The Age of Turbulence, adventures in a new world.

The introduction itself is revealing, he starts on September 11, 2001 and describes the impact on the world and US economy and what steps were taken to protect the financial markets. He then goes on to describe in broad terms the fact that economies are now global, that countries with low standards of living have higher savings rate then developed countries, and therefore have more capital to deploy, whereas developed countries now have extraordinarily low savings rates, and less capital to deploy. When capital is deployed in lower developed countries by the way of credit it sparks demand, which has an exponential effect on those economies.

For example in an undeveloped country I can now borrow money for a house, that means I will need a fridge, a stove, etc, which will spark more economic activity for all. So some of the biggest payoffs for capital will come in less developed countries. So where do you think capital will flow?

What he is saying in a broad sense is this will create and sweeping changes in the world and its value chains, the changes will be rapid, hence his title "The age of Turbulence". We all remember the impact of his statement on "irrational exuberance" in the US market.

Turbulence means rapid change, your business will need to know how to deal with rapid change and identify what can threaten you business early on. This should be an excellent read.