America Is Bankrupt: Is This the End?

‘The American dollar is worthless.’

‘The American economy is going to collapse any day now.’

‘The American century is over.’

Uh-huh. Okay…

Well, barely a day goes by when I don’t hear about the impending doom of the Land of the Free and the Home of the Brave:

• For many conservatives, their pessimism seemed to hit overdrive when Barack Obama and his so-called brand of socialism arrived in the White House.

• Meanwhile, for many liberals, their pessimism seemed to get feverish when Donald Trump and his so-called brand of fascism arrived in the White House.

Unfortunately, I find that when emotions come into play, it can be very hard to have a rational discussion. About anything. At all.

Still, I’m determined to try. And here’s what I’ve noticed. Regardless of whether the prophets of doom belong to the left or the right, one prickly issue always seems to come up.

It goes like this:

• America’s national debt currently stands at around $31 trillion.

• America’s GDP currently stands at around $25 trillion.

• That’s a deficit of around $6 trillion.

• Therefore — gasp — America is bankrupt.

• This is your cue to panic.

• (Screaming and rioting breaks out.)

Yeah, well, pretty dramatic…

…except…

…all the above is complete hogwash.

Please note: America is not bankrupt. Far from it.

Here’s why: America actually has over $145 trillion in total wealth. This is national net worth — which *excludes* any debt liabilities.

Source: Visual Capitalist

Oh, I can imagine you blinking in confusion now. ‘What? How can it be? Why wasn’t I told about this?’

Well, mate, do I have news for you. The mainstream media loves crisis and conflict. I mean, they really, really love it.

Even when there is no drama, they will seek to create one. Just so they can grab your eyeballs. Make some ad revenue off you.

Uh-huh. I’m afraid you’ve been misinformed.

You’ve been misinformed for a long, long time.

So, from this point on, here’s what you need to keep in mind:

• GDP is short for ‘gross domestic product’. It’s the total monetary value of all the goods and services produced within America in one year.

• GDP’s focus is very narrow. It doesn’t take into account things like human resources, natural resources, and technological advancements.

• In other words, GDP does not take into account the total national wealth that America has.

Enlightening, isn’t it?

Of course, when the media places national debt alongside GDP, that figure will look really big and scary.

But guess what? It’s also extremely misleading.

Sure, it makes for a catchy headline…

…but that doesn’t necessarily make it accurate.

In fact, once you understand the theatrical nature of both the left-wing and right-wing media — you will start to see issues like the debt ceiling in an entirely new light.

It’s not quite the Armageddon — or the End of Days — that it’s been made out to be.

Never bet against America

Source: Wallpaper Flare

Believe it or not, America is here to stay.

The nation’s competitive advantage in today’s world is impossible to deny:

• It has strong and stable institutions. A well-established legal and political system provides a stable and predictable business environment.

• It has a highly skilled workforce. America has a large and well-educated population, which is a key factor in attracting and retaining businesses.

• It has a leading technology sector. America is home to many of the world’s leading technology companies, making it a hub for cutting-edge innovation.

• It has access to capital. America has a deep and liquid capital market, which provides businesses with access to the funding they need to grow and succeed.

• Strategic location. America is strategically located between Europe and Asia, which makes it an attractive location for businesses looking to access both markets.

Finally, if that’s not enough, let me put it to you plainly: I have not met a single Chinese or Russian person who would willingly choose to hold all their assets in yuan or ruble.

When given a choice, they would very much prefer to hold their assets in the dollar. No ifs. No buts.

Source: Statista

Look at the big picture. The numbers don’t lie:

• America controls almost 60% of the global stock market.

• For comparison, China only controls under 4% of the global stock market.

• What about Russia? Well, it’s such a non-entity, it doesn’t even appear on the list.

Our opportunity for you

Are you feeling optimistic about America?

Or…are you feeling pessimistic?

Certainly, there are many political opinions out there. But most of them are warped by a negativity bias about America that’s entirely unfounded.

In the apocryphal words of Mark Twain: ‘The reports of my death are greatly exaggerated.’

So let’s put emotion aside. My rational conclusion is this: America will continue to be the world’s number-one guarantor of peace and prosperity. This dynamic nation remains ideally placed to do what it does best — act as the global nerve centre of commerce and innovation.

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At the moment, we have our eye on investment targets in America — as well as Australasia and Europe. We are especially keen on resilient sectors like infrastructure, energy, and healthcare.

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Regards,

John Ling

Analyst, Wealth Morning

(This article is general in nature and should not be construed as any financial or investment advice. Vistafolio services are for Wholesale or Eligible investors as defined in the Financial Markets Conduct Act 2013. Please request a free consultation if you would like to discuss your eligibility.)