There has been an overabundance of media buildup over the past three or four years concerning the economic crisis and condition of the U.S. with many doomsday scenarios. There is no doubt that some of these media concerns and fears expressed, whether blown out of proportion or not, are real. Unfortunately, most people don’t have the time, knowledge or inclination to filter the hype to completely understand, as much as necessary, of how the doomsday scenario propaganda by the media can be brought down to their own personal lives and everyday decisions they need to make respect to their finances.
My lifetime occupation of about 35 years has been helping Canadians and Americans to do business, move to or invest in one another’s respective countries. It always intrigues me, even when I am providing serious personal or business advice, of how often people make critical financial decisions, most often erroneously, based on the media-hyped topic du jour.
The numerous different opinions as portrayed on the news media have created fear in the minds of many Canadians investing in the U.S. or even Americans doing the same. Most rational observers would agree there is no doubt that the U.S. does have to do something relatively soon deal with these concerns. How the U.S. deals with these concerns is probably where the focus of people’s attention should lie.
I believe the U.S. will both survive and thrive through this economic crisis for the following reasons:
- U.S. remains the largest free economy in the world, about 40 percent of the total world financial market.
- Most of the U.S. debt is internal debt — American-to-American as opposed to American with other countries.
- At the very hint of any crisis anywhere in the world, investors continually to rush to the U.S. dollar and U.S. treasuries as the safest place to hold their funds on the planet. This not only provides a lot of liquidity for the U.S., but it also keeps U.S. interest rates servicing its debt very low.
- Like Canada in the 1990s, and Greece, Italy and Spain in 2011, governments eventually come to the realization they must take decisive and painful actions to reduce their debt burden down to manageable levels. I’m sure the U.S. government will come to that point soon if they haven’t already.
- The U.S. has the largest gold reserve of any country in the world, and we all know what has happened to the value of gold over the past decade.
- U.S. is the largest exporter of food items that help feed the world; people need to eat so the demand is reliable and growing.
- The U.S. federal government is considered the biggest landlord in the world owning or controlling billions of dollars of commercial land and properties.
- Because of the rule of law, knowhow and freedom given to its citizens, the U.S. continues to lead in innovation continuing to create the largest and some of the most successful corporations in the world like Apple, Google, Facebook, Coca-Cola, McDonald’s, Wal-Mart, IBM, Boeing, and the list goes on.
- The U.S. continues to be the destination of choice for legal immigrants from around the world most of whom are very well educated. Because of immigration and one of the best birthrates in the developed economies of the world, U.S. has sustainable population growth whereas other countries, such as Japan, indicate their populations are shrinking.
- The U.S. and its citizens have been rated the most charitable in the world.
- The latest in oil and gas drilling technology and the new discoveries in the Dakotas along with the Keystone pipeline from the Canadian oil sands indicate that the U.S., in a very short time, could be at least North American energy independent and will no longer need to import oil from the Middle East or other unfriendly areas of the world.
- The U.S., in its 235-year history, has gone through substantially worse crises and rebounded with equal or greater economic growth.