Is the patient getting better?

The US economy appears to be on a sustainable path of growth with the latest Q3 2013 GDP estimate coming in at 2.8% up on Q2, which itself was up by 2.5%.

The EU is all excited by the fact that Germany is back in positive territory and despite a -0.4% estimate for 2013, they are projecting 1.1% for 2014.

China’s latest growth rate came in at 7.8%, well above most estimates. Time to celebrate? Maybe, maybe not, depends whom you are listening to.

Looking at the main economic indicators there is definitely room for optimism. The US particularly is set up to be the locomotive that will pull Asia, particularly China, into increased growth due to rising US consumer purchases.

Northern Europe is also well placed to pull out of the quagmire that it managed to push itself into. UK and German growth in particular is likely to lead to an improved consumer sentiment, which in turn leads to increased spending, all good for China export machine.

The flip side of the coin is the fear that all of these positive indicators are short term and illusionary as the danger of deflation, that is, inflation at extremely low or negative levels, can cause economies to flounder.

While the Germans are particularly worried by this, the Mediterranean countries prefer lower interest rates and are not concerned about inflation figures. The split views on this is causing a significant amount of mud slinging between German and Italian economists. Was not the Euro meant to solve these differences of economic policy?

The take-away? This economist believes that we will see solid growth, at least in trade, in the coming six months as consumers finally open their purse strings a fraction more.