Note from Louis Basenese: Last week, a rash of weaker-than-expected economic reports culminated in a 512-point drubbing for the Dow on Thursday. Is this the beginning of the end for America’s economic superiority? I certainly don’t think so. Nor does my colleague, Carl Delfeld. And he’s got seven compelling statistics to back it up below…
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A recent study from Pew Global Attitudes showed that 15 out of 22 nations believe that China has replaced, or will soon replace, the United States as the world’s leading superpower.
I don’t recommend that you subscribe to such a pessimistic view of America, though.
Why? Because there will always be some sort of crisis facing any country. The key is to find a way to fight through it and figure out how to prosper. And Americans have a penchant for doing just that.
So while the mainstream financial press is overflowing with negative commentary, I’m actually very bullish on America’s future.
Here are seven reasons why you should be, too. Or at the very least, why you shouldn’t count out Uncle Sam just yet…
Chew on These Pro-America Stats
~ Manufacturing Might: America is still the world’s leading manufacturer, with 22% of global manufacturing, focused primarily on advanced, capital intensive production.
~ Small Population, Big Productivity: Although the United States population is about one-fifth the size of China, the American economy is still three times bigger. And American manufacturing workers are eight times more productive than their Chinese counterparts.
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Moreover, America’s multinationals are dominant, representing 47 of the world’s 100 largest companies by market value. Meanwhile, 15 of China’s 20 largest companies are state-owned and run.
~ Export Rich: America is the world’s third-largest exporter (just behind China and Germany) and its upside potential is enormous. Only 2% of America’s small- and medium-sized businesses export at all right now. And about two-thirds of our trade deficit is due to Chinese and energy imports.
~ Bountiful Agriculture: America remains the world’s agricultural king, accounting for 20% of global trade. It has twice the arable land of China (which is 25% desert) and its farms are the most productive in the world.
By contrast, 60% of India’s people are in agriculture, but the sector accounts for only 15% of GDP. Moreover, about 40% of India’s crops spoil on the way to market, due to poor infrastructure.
~ Resource Rich: The United States boasts 28% of the world’s coal reserves and Louisiana alone has four times the proven natural gas reserves of China.
The United States has twice the fresh water of China, while China’s annual carbon emissions are already twice that of America.
~ Investment Capital Magnet: America is still the No. 1 destination for foreign direct investment. On a cumulative basis, it has four times that of the United Kingdom and six times that of China.
Bottom line: Just like every country, America has its share of economic challenges. But it’s hardly on its last legs. It has tremendous strengths and its ace in the hole is its open and flexible economy and society.
So ignore the “America is over” crowd. As Winston Churchill famously said, “Keep calm and carry on” – and in this case, do so with American stocks at the core of your well-diversified global strategy.