Morgan Stanley's economists have this to say about the future:

"First, the victims of globalization -- unskilled workers in high-income countries -- have been defending their lifestyles with debt, but may not be able to do so in 2006 due to higher interest rates and the surfacing credit problems in this segment. Globalization has appeared a win-win for everyone so far. This is just a perception. Stagnant income growth among unskilled workers in high-income economies is a telltale sign. This should not be surprising, as unskilled workers in rich economies now compete against workers in developing economies that are muscling their way into the global economy."

Or, in Thomas Friedman's lingo, "The world is flat."

I'm increasingly worried that 2006 will bring about serious economic problems in the United States. A collapse of the housing bubble would lead to severe cutbacks in consumer spending. We can't do debt financing forever, and that's what happened in 2005. Americans' savings rate was -0.5 percent. Meaning, we put it on the charge card (or the mortgage, as the case may be).

Ain't no free lunch, chil'ens.

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12:11:15 PM