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Prospects for the Northern economy by 2022

November 29, 2012

The northern economy is set to prosper over the next decade - a higher growth region within the low growth western world. Here’s why.

The World Bank data shows the western world, aka the US, Japan and Europe, slipping rather dramatically in terms of world share of GDP. The United States fell from 32% to 22% in the period 2001 to 2011 (a 32% decline). Japan dropped 35%, Britain 24%. Each of these nations has pursued a policy of aggressive monetary easing commonly called money-printing. The US has shunned making hard budget decisions and has let its federal budget deficit run at $1.3 Tr for the last 4 years. Japan has similarly allowed debt to grow to very high levels. The UK has adopted some austerity measures, yet struggles to near budget balance.

Extrapolating the World Bank data for ten years into the future. The data suggests:

The northern areas of North America contain resources that are attractive to resource consumers, particularly in Asia. In the next ten years:


The policy makers in the United States, Japan and Europe need to wake up and smell the coffee. You cannot ‘print’ your way to prosperity. The process of capital formation and investment requires savings to be funneled into investment. In northern regions, there are numerous projects that attract such investment which in turn leads to higher GDP. That is why the northern regions will do well over the next decade.