G7 vs E7 - the new world order is moving to emerging markets

The G7 - Canada, UK, Germany, Italy, France, Japan, US

The E7 - China, India, Brazil, Russia, Mexico, Indonesia, Turkey

Formed in 1976, the G7 represents the old order. The E7 will match the G7 in less than 10 years and be significantly larger, some say 30% in 20 years. Look closely, the G7 has three EMU countries that do not even have their own currencies. The E7 already has four of the top ten spots with respect to GDP as measured by the IMF. The E7 is generally in current account surplus and are adding international reserves while the G7 are running both large government fiscal deficits and current account deficits. The population of the G7 is shrinking while the E7 is growing. The demographics of the E7 are much better than the aging G7 except for China. The center of international finance will continue to tilt to the E7. Market capitalization of their stock markets will continue to grow.

All of these trends will mean a further shift in finance and investing to emerging markets. Perhaps we have to come up with a new term to describe these countries. They have arrived.