by Bruce Kellogg, MAI, FRICS, MG Valuation
The following summary was compiled during a presentation by the renowned economist, Marci Rossell, Ph.D. Marci has graced the CREW Atlanta Chapter for nine years and she is a major draw every year. This year was a joint venture with the CoreNet Global Chapter of Atlanta at the Cobb Galleria on January 9, 2017, which drew over 700 attendees. We were not disappointed!
Marci began by stating that the impact of the election will be less than most people think. Initially, there will be cuts in corporate taxes and an increase in the stock market. The nominating process may extend this over some period.
The administration will be hampered for about 3 years over manufacturing jobs and the appreciation of the U.S. Dollar. The U.S. Dollar will be strong compared to currency in Europe and Japan. The U.S. Dollar has been pushed up, growing at a rate of 3.5% versus the others. The imports will be cheaper and exports will get more expensive globally, which will translate to a loss of manufacturing jobs in the U.S. This is similar to the era from 1981 to 1985. In 1985, we had the Plaza Accord (named after the Plaza Hotel in NYC), which resulted in a destabilizing impact and created tension around the U.S. We may see this again around 3Q17.
The New World Order indicates three (3) changes to be aware of:
- Globalization, which peaked in 2001
- Rising nationalism / regionalism along with unraveling of globalization (e.g., Brexit)
- S. Nationalism, based on Trump’s agenda
Demographics are responsible for much of the change. Most of the World War II population is gone. As a result of the new demographics, regional buildings will be developed more locally. Also, the growth in China will give way to India. There is currently much vacancy in China after a huge amount of construction in the past. India is the most promising when looking to 2020, when most of the population will be young.
Globally, the Baby Boomers will give way to the Millennials economically. There was a total population of Baby Boomers of 77 million. The total population of Gen X-ers was 57 million. The total population of the Millennials is 66 million. However, the Millennials outnumber the Baby Boomers today, due to the declining number of them remaining. It is also a fact that, the older one gets, the more conservative politically one gets. The economic power is currently shifting to the Millennials (18-35 year olds), with the biggest economic gains for those aged 25-35. This group is buying houses, getting married and having families. These activities are being delayed approximately 10 years from when the Baby Boomers went through this process. Millennials have been impacted by the recession (2008-09). They enjoy city living more than previous generations did, especially in Atlanta. There are many opportunities for success and growth in Atlanta, due the cost of living overall.
Globalization as we know it will be changing from what we know today. Of all the nations on the global scene, India may turn out to the best country with which to do business with the West. History is important. Russia is turning out to be a threat to the European continent and will be aggressive nationalistically to grab things from other nations.
Manufacturing jobs peaked in 1980. Since then, they have been lowered as a percentage of total jobs. However, if the national focus is only on the number of jobs, that would be a Marxist perspective. True Democracy focuses on the overall well-being of its citizens.
If you missed Dr. Rossell this year, we anticipate celebrating her 10th-year presentation in early 2018. We hope you gained some perspective to the current state of affairs in a changing world.
Bruce Kellogg is Managing Director with MG Valuation LLC, responsible for business development, and client relations worldwide. Bruce has over 40 years of experience in the valuation profession, serving the real estate and related software industry. He’s an influential, collaborative relationship developer, and a visionary on a national and international scale.
Bruce holds a B.A., Liberal Arts & Sciences from St. John’s University. His areas of expertise include: led, managed and on the Board of numerous Real Estate and Software Associations, generated new business through industry contacts and solid, long-standing client relationships, managed staff, quality control, standards and sales to improve profitability, and served as Editor-in-Chief of Real Estate Outlook, an international research publication.
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