For years, economists and financial analysts have talked about the BRIC countries, i.e., Brazil, Russia, India, and China. As a group, they were rapidly growing economies dependent upon export growth. As a group, they need to curb their internal savings by individuals and increase consumption spending by those individuals. This is a happy problem.

Now, economists and financial analysts are talking about the HIIC countries, i.e., heavily indebted industrial countries, like the U.S., England, Europe and Japan. As a group, they are well-established democracies with a high level of social benefits, such as Social Security and Medicare, which creates a high level of debt. As a group, they are growing slowly and are dependent upon consumption spending to power their GDP. As a group, they need to increase internal savings at the expense of consumption spending and to increase exports. This is not a happy problem.

So, which set of countries will have the best performing stock markets? Here are the BRICs for the third quarter: Brazil (+22.1%), Russia (+12.3%), India (+16.1%) and China (+12.1%). The U.S. stock market gained a relatively puny +11%. Of course, one of the reasons foreign markets beat us so badly is because the dollar has resumed its expected depreciation. But, since it is easier to increase consumption spending than to increase exports, I continue to believe the emerging markets are very attractive for investors. The depreciating dollar will only magnify the difference.

Talk about an inconvenient truth . . . we need to save more, export more, and consume less!