The Burgeoning Bourgeoisie: Unintended Benefit of Credit Crisis?

If you’re in the mood to be (however briefly) a little more bullish this weekend — and I’m planning a post later today on healing credit market indicators — you’ll like a supplement in the current issue of The Economist. It touches on something I’ve been thinking about a great deal of late: The new bourgeoisie.

The gist: The credit crisis, for all of its awfulness, arguably had the unintended consequence — pace venture capital and the Internet in the late 1990s — of sending a tsunami of money into developing countries, from Eastern Europe, to Africa, to SE Asia, thus accelerating the pace of their entry into a new middle-class. Most of that money will be wasted, and an Eastern Europe default wave could still  put paid to the November lows in markets, but the overall effect will largely remain:  A larger cadre of the newly middle class in many emerging markets than would otherwise have been the case.

Check the following figures for some useful related data, As the first chart shows, the rush of capital into developing countries was correlated with the fastest pace of middle-class-ification of the world since the 1920s.

However halting the effect becomes, you ignore the force of this new wave of consumers at your peril. More here.