You may not have noticed, but America has recently become more powerful than ever. In the last fifteen years, the US economy doubled in Dollar terms versus its next largest rival, the EU, which is now divided. China is a demographic timebomb that is slowly unravelling, the Russians shot themselves in the foot, and the rest of the world is much too small to compete.
US Stocks are worth as much as every other publicly traded company on the planet. Despite every effort by the BRICS, the Euro or Gold to dethrone the mighty Greenback, the US$ still makes up 90% of all global foreign exchange transactions. Nearly one third of all global consumer expenditures, occur in the land where the Dallas Cowboys play football.
Makes you wonder why Donald Trump keeps telling us America is doomed, but clearly you can’t win an election by revelling in the work of the incumbent administration. Whatever the outcome in 2024, US superiority won’t be waning any time soon. Too large is the gap in technology, the efficiency of its capital markets, and size of its consumer market.
Does this mean we should just buy an S&P 500 index tracker and watch the football? Maybe, but nothing lasts forever, and the markets don’t work that way. In the next forty years, India is projected to overtake the US economy, but its stock market has already been outperforming for more than twenty years.