Only the Long Term Matters

Worldwide commentary would make it appear as if the United States has become a global economic burden. Dire predictions of sharply reduced military strength and shrinking political influence abound. Alas, these commentators are sadly mistaken.

All too often, forecasters are looking only at the short term. Their long term usually means next week. Yet, the world turns much slower than the typical media blurb makes us believe.

Leading powers always suffer from voices of discontent – but other than key players in the past, the U.S. encouragement of free speech leads to global discussion rather than to underground communication. Think of how the U.S. was attacked globally in word and action in 1917, in 1942, and many times since then.

Over the past 60 years, the U.S. has consistently been the key contributor to the world economic growth and welfare. In the 1940’s, its leadership created the World Bank, the International Monetary Fund and the General Agreement on Tariffs and Trade – now the World Trade Organization. These three pillars reduce global poverty, support financial flows and set fair rules for all participants in international trade. In the 1970’s, U.S. courage and conviction led the move from gold related fixed exchange rates to floating ones. This shift allowed money supply to grow and gave rise to world economic abundance.

The country's willingness to be the largest marketplace to the world has provided opportunities for innovation, growth, profit, and enjoyment to many. And all this has been achieved within a system which provides for political adjustments and transitions without unchecked power, bloody battles or economic destruction.

The U.S. remains the land of opportunity where one can realize dreams under open skies. It continues to be a key destination for immigrants, because they know that vision is admired, that effort is rewarded, and that achievement is supported.

These are the factors which set the U.S. apart from other nations, and affect the investment behavior of the world. But after years of predicting economic decline, some forecasters have even breathed a sigh of relief that their dismal future has finally been sighted.

There is no reason to lose heart due to temporary setbacks. The United States continues to present new and special opportunities to the world. It offers the security and safety that have, sadly, been unattainable for most people on earth. It presents a vision, flexibility and capability to adjust to new conditions which are the envy around the globe. Let us use a long term perspective to appreciate past effects and future prospects. Global investors are not foolish when they show their reluctance to turn away from the dollar. What determines the value of money in the long term is the trust, promise and the future that a nation offers to those holding its currency. To the forecasters full of dismay I suggest: Don’t write the US off too soon – remember the Roman Empire lasted more than 500 years – the Ottoman Empire almost 600. Yes, it’s sometimes lonesome at the top!