I thought with the Olympics coming up, I’d do an unabashedly rosy investment tip about the US. And I think we need one. To read the press or listen to the talking heads on TV and radio, the US is made up of poor, lazy, greedy, poorly educated, unproductive deadbeats. Often though these people are talking about the change in numbers, rather than the numbers themselves. Or else they just have an agenda. Let’s look at some of the surprising data.
You read about how China is overtaking the US and will be the really big economy for the 21st century. Well maybe. But the US GDP is about $18 trillion, versus only about $8 trillion for China. In fact the GDP of the US is just slightly less than the total for China, Japan, and German (the number 2, 3 and 4 countries) combined.
Yeah, but we haven’t saved any money and we’re drowning in debt. The reality? Debt service related to household income is at about 10%, which is the lowest it’s been in the US in more than 30 years. A lot of debt? Yes, about $14 trillion, including mortgage debt. Ha, see a debtor nation! Except that the total value of household assets in the US is $91 trillion. That is a very big number, and dwarfs our debt payments.
We hear about how poorly educated Americans are. But consider that at least 15 (the count differs from different sources) of the world’s top 20 universities are in the US. We have the best education available in the world.
Americans are lazy, aren‘t they? Consider though that the average vacation taken by Americans every year, is about 13 days, versus 30 days for the rest of the developed world. Many people think that’s not a great thing. They may be right, but they can’t call us lazy.
Let’s face it, the US is made up of a bunch of money grubbing capitalists, spending money for no reason. However, people in the US contribution $300 billion per year to charities. That amount of money is greater than the total GDP of all but 35 countries. We essentially give away the total economic output Denmark or Singapore every year. That’s not the government, that’s you and me.
All fine and good you say, but how is this an investment tip? Well we’re told all the time about investing in emerging markets, about putting out capital to work overseas, because that’s where the best opportunities are. But I would make the case that you might want to invest a sizeable chunk with those poor, lazy, greedy, poorly educated, unproductive deadbeats in USA.