"This is far and away the strongest global economy I've seen in my business lifetime," U.S. Treasury Secretary Hank Paulson declared on a recent visit to Fortune's offices.
....John Chambers, who last fall opened Cisco's new Globalization Center in Bangalore, seconds the notion that "this is the strongest global trend" of his career. "There is a unique balance today," he says. "More than half of GDP growth is coming from emerging countries. And yet the developed countries are also doing pretty well. It is something we have never seen before."
....While the current pace isn't quite a record - according to the IMF the world grew at a 5.4% average annual rate from 1970 to 1973, vs. a projected 4.9% from 2003 through 2007- there's really no contest. When our ties were fatter and we were thinner, total world GDP was $13 trillion in constant dollars. Today it's more than $36 trillion. Not to mention, as investor Jim Rogers notes, "there are three billion people in places like Eastern Europe, Russia, India, China, and all of Asia who weren't participating last time around but who now are." Back then, Germany and Japan led the charge. Now the emerging markets are running fastest, along with Europe, which has - for the first time in years - pulled ahead of the U.S. in GDP growth.
....So where does the world stand today? A little less complacent, at least measured by column inches and airtime. Not a day passes that someone doesn't fret about any number of potential buzz killers: protectionist sentiment in Congress; the humongous U.S. current-account deficit; unprecedented levels of debt buoyed up by know-nothing-and-don't-want-to lenders; the housing slump; and more. On the other hand, measured by what really matters - the money - Mr. Market so far doesn't seem too rattled. Risk spreads, or the gap between historically sketchy paper, such as emerging-market debt or junk bonds, and risk-free Treasuries remain near all-time lows.