Is change is upon us?

05/11/09 - Guys Fawkes in the UK, but the real fireworks are lighting up the sky across the pond as Barack Obama wins the general election and becomes the first black president of the United States. It's hardly a surprise; however in a year full of negative monumental historical markers, in Obama's victory we may finally have a positive one.

As the banking crisis fuels rising unemployment and the sharpest fall in US (and just about everywhere else's) consumer confidence since records began, a sense of Change and what will hopefully be a renewed sense of confidence in the worlds largest economy can only be a good thing. The current crisis of confidence has swept through the world markets like a forest fire, as the world scrabbles for risk aversion in the fear that what is bad for the US is bad for everybody and everything and in doing so create a self fullfilling prophecy. The question many will be asking now is, will this political Change start to reverse that effect? My answer: If only things were that simple.

I feel we still have a long way to go particularly in the West before confidence is restored. There will be more bad news and fatalities amongst banks and hedge funds along with large corporates, possibly in the retail industry, certainly in the automotive industry. I think  what we will see with the new U.S government is America shrink within itself over the next few years to get its house in order - and it has a great deal of cleaning up to do. Through this process, I hope an eventual lack of shock news and "gung ho" foreign policy, some semblance of norm and common rationality should return to the commercial world.

This rationality should be reflected in the realisation that there has been a large shift in economic influence away from the West to the East, Middle East and parts of Latin America. Why? America (and the UK for that matter) can not fix its problems alone. Already Sovereign Wealth Funds from the Middle East have been invited to invest heavily in western corporates' and banks, for large equity discounts. In time this will undoubtedly see the Middle East have greater global influence and power over the US decision makers.

Unilateral ties are being agreed daily between the Middle East and the Latin American countries with strong agricultural and energy industries/prospects. I would think these roots will see the US foreign policy more conservative with less sanctions and more free trade with Latin America and if the dollar remains relatively strong their export industries and GDP should continue to grow faster than that of the West in future years.

We could go in to more depth but in short (and will do over the coming months), but breifly what does this mean for the international property? I lay myself open to criticism but simply believe you are probably better off looking for value in undervalued economies, such as Colombia, rather than stale ones closer to home. Change is indeed upon us.....