10 year anniversary in post-american world

Its been ten years since the 9-11 terrorist attacks. Ten years into the new post-american era that is being defined by tremendous shift in wealth, credibility, and relevance from america to the rising economic powers of tomorrow. What happened in the past ten years that lead me to believe this?

– collapse of american housing market, 2006-2008
– collapse of lehman and bear stearns: summer and fall of 2008
– US debt downgraded to AA, summer of 2011
– sustained unemployment of greater than 9%

Post undergrad entry level positions in 1990’s were ~$45k. Post undergrad entry level positions in 2011’s were ~$45k. Houses are now more than three times more expensive, as is fuel and consumer goods. Is the standard of living in the united states declining?

There are several factors, including the united states government levering up to support growth in the 80’s and 90’s, increasingly imbalanced international payments, inaccurately perceived wealth effect from rising home prices that encouraged households to increase consumption to an unsustainable rate, the increasing drain on our country’s economic resources to support a bipartisanship government structure that is both slow in decision making and terrible at reducing future uncertainty, etc. Right now unemployment is at all time highs, market volatility is out of control, and, not only investors but also the voting americans are afraid of the economic future.

But of course this is not to say that the chinas, indias, and brasils are the current safe havens. Developed europe markets are currently dealing with their own issues (should not have let greece in the eu in the first place). If the us economy sneezes, the whole world gets sick. Everyone recognizes this and will be pushing to move away from the united states dollar as the reserve currency over the next 30 years.

America is still a great place for business (except obama voiced his plan to close tax loopholes) and for innovation. We need real growth to support this economic machine. Real products with real buyers.

Excited and anxious for the future.

Andy

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