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David Murrin: Western World Is 'Finished Financially'

Friday, 02 Dec 2011 06:10 AM

By Forrest Jones

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Growth and investment opportunities will be found in emerging markets while the West is "finished financially," says David Murrin, CIO at Emergent Asset Management.

"This is the moment when the Western world realizes it is finished financially and the implications are huge, whereas the emerging BRIC countries are at the beginning of their continuation cycle," Murrin tells CNBC, referring to the BRIC group of big emerging markets Brazil, Russia, India and China.

Leaders in the U.S. and Western European countries have been unable to craft policy that generates sustained growth, which will leave them in the economic doldrums from time to time.

When economies grow so slowly that they cannot outpace inflation rates, they experience negative real growth, which can be dangerous.

"Societies fracture when you have negative real growth and quite simply our society faces fractures for trying to stick Europe back together again," Murrin says.

So in the long run, get ready for China to rule the world.

"This isn't just a BRIC story, this is the end of the Christian Western Empire versus the rise of the whole emerging world led by China as the foremost and most powerful," Murrin says.

China recently took an about-face with its economic policy, shifting away from fighting inflation to fueling more growth by cutting reserve requirements on banks.

"This is a big move — this is easing," says Stephen Green, China economist at Standard Chartered Bank in Hong Kong, according to Reuters.

"It's a clear signal that China is on a loosening mode," Green adds.

© 2013 Moneynews. All rights reserved.

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