Will they never learn?
The gurus and pundits are, once again, peddling the end of America – proclaiming that the U.S. dollar is a paper tiger, and the American economy is crumbling beneath our feet.
The best way to address this wrong-headed thinking is to confront it with the facts – brutally delivered by the global markets.
Looking back over the last 30 years, gold is up 224% and the S&P 500 has posted a return of 1,820%. And during this same time period, Japan was up 144%, and emerging markets were up 694%.
Despite the headwinds of a strong dollar, the S&P 500 has gained 47% over the past five years. The MSCI China Index, on the other hand, has been a huge disappointment – it's up only 3.4%.
The U.S. dollar is also up 27.2% over a basket of six leading currencies and is on one side of 90% of global foreign exchange trades. In stark contrast, the Chinese yuan is on one side of only 2% of these transactions.
I could cite more statistics… For example, the value of American commercial real estate accounts for 40% of the value of the world's commercial property.
But the point is, in good times and bad, America is a magnet for capital and is the best safe haven in the world.
How America Measures Up
Don't think I ignore the tremendous challenges America faces. I get as frustrated as any American about our country's shortcomings. More than half of my book – Red, White & Bold: The New American Century – outlines these significant speed bumps and how to turn things around.
But keep in mind that when a country decides in which currency to safeguard its trillions, it's looking beyond the headline news of GDP growth, budget deficits, or the latest job report.
It's looking at a bigger and deeper picture, and especially at institutions that promote resilience, stability, openness, flexibility, mobility, and transparency.
Why?
Because history shows that these traits lead to innovation in technology and finance, superior universities, vibrant entrepreneurship, openness to new talent, a stable currency, social mobility, and political stability.
