Global Infrastructure – Money That Needs to Be Spent

One of the most exciting trends in economics is the development of emerging economies. With this development, we are seeing a huge build out of electrical infrastructure, water pipes, roads, sewers, and other enormous projects. The most visible of this is in China, where the central planning committees have done an amazing job of creating full-sized cities in very short periods of time. But development like this is happening in countries all over the world at varying paces.

Many people know about or have at least heard about some of the major projects in China – for example, the Three Gorges Dam which will produce much needed electricity for China’s growth – but perhaps most people are unfamiliar with the development in Brazil, Vietnam, Africa, Russia, and other interesting places.

For a very interesting rundown on developments, read this conference call transcript from the CEO and Director of Research at US Global Advisors, an investment management firm:

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And for more background, check out the Wikipedia page for the Three Gorges Dam:

According to this, the dam will provide 22,500 Megawatts of electricity, enough to power 18.5M US homes – making this the largest capacity of any hydro-electric project in the world, according to Wikipedia.

According to the executives of US Advisors on that conference call, the USA also needs $1.6T of infrastructure spending simply to get our infrastructure up to speed – not to make it advanced – merely to bring it up to acceptable standards. Worldwide, they estimate infrastructure investment to be 41 Trillion dollars! And chances are, even with a recession, this spending will go through – we don’t want bridges falling and killing our citizens right? And there is a good chance that this spending may increase as governments try to spend their way out of recession (if we get one).

Therefore, if you like to research economic investment trends, try the global infrastructure theme- you might find it quite interesting and appreciate how it is driving much of what goes on in global trade today.

Chris Grande