Good question, although to be fair I am concerned about most western economies – I haven’t just singled out the U.S.
That said the American attitude to debt is hard to fathom. At least in the UK the new coalition government are trying to reduce debt to some degree.
But look at the numbers in the U.S. and it is like an instant heart attack.
Over 8 million jobs were lost in the crisis. But the U.S . needs to create 15 million MORE jobs over the next 10 years just to keep up with population growth. Finding 23 million jobs would require a miracle in the boom years – and this ain’t the boom years.
How are they doing? How many jobs were created over the last quarter. Answer – ZERO. Not one. Nada. Zilch. None.
On the contrary the economy lost Instead, the economy LOST over 300,000 jobs.
If you are looking for a recovery you need to increase employment.
At the same time government spending continues to increase and average salaries continue to fall. Mortgage delinquencies continue to rise and house prices continue to fall.
You really don’t need me to point out that this is not the kind of scenario that would interest an investor – not yet anyway.
The property market is falling rapidly over there and I regularly receive deals that offer 75% discount. Can you imagine? For someone in the UK who is used to property prices holding firm – that is a bit of a shock. Of course the price itself is academic – it is the rental value and your ability to collect that rent that matters most.
A friend of mine just picked up a $1.1m mansion for $365,000. That’s a steal – provided you have the cash and are not dependent on rental income or bank loans that is. As always – cash is king.