Geopolitical Series: United States of America

Posted: August 13, 2013 in Uncategorized

The USA is a very different country for anything else.

It is actually more similar to a corporation than a country. It goes to war, but mainly to defend its political interests, not as a “conquistador”. Even the conquest, often, it is just to secure an economic outcome.

Once one understands this basic principle, the US are easy to understand.

Being a “corporation” it falls faster in time of crisis and then recover faster in times of boom. Like an efficient corporation, it has very  low (relatively speaking) red tape, so it can shed employees and then rehires very fast. Also its workforce is mobile (that is why the GFC was so crippling….the crash in the house value practically froze the workforce into place).

Yes it is full of debt and it is money printing like no tomorrow, but remember that during the GFC a lot money got destroyed (approximately 2.1 trillion USD…and then they reflated with 700 billion….that is why there is no inflation).

But the big game changer for the US is the gas-oil shale revolution.

This revolution (by 2017 the US is projected to have more oil than Saudi Arabia) has some major geo strategic implications:

– US is not anymore willing to be the world policeman. It will try to stay out of the Middle East (Israel included)  or Pacific disputes as much as it can

-US economy will be ultra competitive also against Asia as energy cost are at least 30% of anything produced 

Who was claiming the decline of the American power is greatly wrong. The US will be more a first between equals, but out of its will not because of a decline.

The market will not go up in a straight line, probably the first issues in this rally will be September – October, but we will go up for a while. 


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