Old vs New G7

When I started out in this business, the US was the world's largest economy by far.  It was enough to know what the US and the other G7 countries (in order of size, Japan, Germany, The UK, France, Italy and Canada) were doing to know what was happening in the overall world economy.

That was the old G7.  The new G7, the 7 largest economies now, is still headed by the US, though its weight has fallen a lot, but the membership of the club has changed a lot.  Now the other six are (in order of size) China, Japan, India, Germany, UK &  Russia.

Just look at this chart.  The new G7 fell by less than the old, and has recovered faster after the GFC.

Yes, Europe is in the doldrums (failed economic models take a bow), yes the US is struggling to grow, and yes, if you focus on things as they were, the outlook appears bleak.  But if you look at what is really happening, the world is still growing.  Despite the headlines.  And if Europe would ditch its unseemly passion for fiscal austerity, you might even see growth there too.