Most of the articles I read these days seem to take one of two opposing viewpoints – the more dominant one (since I read a lot of contrarian stuff) is that the USA is headed down in a big way, that the dollar as a currency is doomed, and that the increasing levels of US debt are going to crash the financial system, causing a severe worldwide depression. Their conclusion – buy gold. Gold, they say, is the only store of value that will be worth anything in the coming crisis. While I do own some gold as an investment, I’m not sure it is the end-all, be-all asset. (More on that in a later post.)

The other side seems to indicate that growth, jobs and the economy are doing well, commodities are going up because of strong demand, and the US deficits don’t really matter, because the important thing is that we are driving growth and everyone is getting wealthier. They point out, rightly so, I think, that some people are bearish all the time, and are bound to be right every once in a while, but most of the time wrong. (It’s like the old analogy – even a broken clock is right twice a day.)

Which do you think it is? I, myself, am of a more moderate viewpoint – I don’t have the rose colored glasses (anymore!), so I don’t think everything is great, wonderful and growing, (I’ve seen enough reports on government statistics to know better than to trust them) but, by the same token, I don’t think we’re all on a superhighway to hell either (AC/DC aside).

I am concerned about the US Debt level (balancing budgets seems to make sense to business people, if not lawyers, economists and politicians) and the aggressive nature of world politics in general these days, but I also believe that the future winners of the economic cycles will be those that protect property rights and promote free trade. I’ve lived in a communist system – I don’t believe it is efficient by any standards. So as long as the government maintains free trade policies and doesn’t stifle businesses with too many needless rules and requirements, the US (or any country, for that matter) will be fine. It’s the Hong Kong model of capitalism – the more you keep the government out of business, the better off everyone is…

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