In this article Gus Lubin provides the stark reality behind why the US won't be the leader in the Western Hemisphere forever. Brazil is the first nation expected to pass the US. They produce over four times as much iron ore as the US, export twice as much beef as the US, are an important part of BRIC (Brazil, Russia, China, and India-all emerging markets with high potential), and are on good terms with Iran.
Besides Brazil, countries like Mexico, Chile, Canada, and Venezuela are also candidates to pass the US. The world's richest man is a Mexican. Chile produces 300% more copper than the US (which used to lead the world in this category). Canada and Venezuela are expected to pass the US in oil production in the coming decade. Finally, Canada, Mexico, and Brazil invest a greater share of their GDP in green energy.
Overall, this article paints a dreary picture of what is to come. The US, a world leader for many years, might soon relinquish its power even in the Western Hemisphere. Will this come to fruition? The facts are there. What does everyone else think?
It seems like many countries in the western hemisphere are surpassing the U.S. in production of raw materials. But doesn't the U.S. produce a lot of technology that these other countries don't? I don't think that the U.S. will fall behind very quickly and if they do it will take a long time.
ReplyDeleteI think you're missing the link to your article, Denis. But on the subject of the dominance of America in western economics, I have to agree with Samuel. For as long as we are the leaders in technology and business expansion (and even cultural influence, but that's another topic), I don't think we can lose our place as the most influential nation.
ReplyDeleteThe thing is, nearly all of the aforementioned countries are seen as consumers of American products, not as competition. American businesses are expanding through all those countries as sources of revenue and production. Brazil, in particular, is viewed as a goldmine for American businesses. Google's version of Facebook targets audiences primarily in India and Brazil due to their massive populations and because Facebook is already the dominant network in America. Canada relies on American oil refineries to produce fuel that THEY got from their own mines. If their own refineries ever develop, then companies may need to worry about losing foothold. But in terms of American "power" over the western hemisphere, there is almost nothing to fear until other countries can bring their technology and business up to speed with American economics.
I feel that this point is pretty solid. First I would like to say that though Mexico has the richest man, the United States has the second along with the third richest. I feel that some of this is a definite possibility. The United States does rely on many countries all over the world for a number of products. They are still in debt to so many countries, and in debt from their own actions. I feel that the US does do some great things, and make some solid products, but I feel that we have to become more self reliant. Though it would not be easy, it could save us money in the long run. If we start to produce the items/food/products that we import than it would be a lot easier. I know that there are some items that we need to import, but overall we can make our own products. That could lead to more exporting and have other countries buy our products. We end up paying others for what they have, and then we pay interest and it starts building up.
ReplyDeleteEmerging market countries (Mexico, China, Brazil, and Korea, to name a few) have recently caught the eye of not just the retail investor, but the institutional investor as well. Plus, international benchmarks like the MSCI ACWI (All Country World Index) have increased exposure to emerging countries - that says something.
ReplyDeleteRecent research from Goldman Sachs’ suggests that emerging markets equity capitalization could rise to roughly 55% of global equity by 2030. While emerging countries may provide more GDP growth than here in the US, cost of doing business in these countries remains expensive due to the lack of infrastructure. US based companies will be able to grow their top lines (revenues) from exposure to such countries, but will most likely (it depends on the business) be unable to generate significant margins in the near-term.
Have any teams researched the amount of revenues your holdings generate from international operations?
Here is the link to the article:
ReplyDeletehttp://finance.yahoo.com/tech-ticker/10-signs-the-us-is-losing-its-influence-in-the-western-hemisphere-535456.html?tickers=eem,ewz,fxi,eeb,jjm,%5Edji,xle
I believe that the US will and can hold their dominance in the Western Hemisphere. They are way to advanced and powerful to be overtaken to any other country. It is true that these countries have a lot of raw materials however Brazil doesn't have have any ways of mass trade transportation to fully utilize the profit that they could earn on selling all of the raw materials they posses. Our means of transportation and quality of machinery that are being built here in the US surpass most countries in the world. We have so many businesses and how our economy is set up our economy continues to improve constantly with businesses staying competative and therefore having them become more successful and efficient at what they do.
ReplyDeleteI think that the US may be losing its influence, but it is happening very slowly. As was pointed out, our previous dominance of raw production has dwindled somewhat. In antithesis to this, it was noted that we are still leaders in technology, business expansions, and (parenthetically noted) cultural influence. However, our leadership will not necessarily continue in those fields. Compared to other countries, the United States is very protective of their workers. For some business people, this serves as incentive to move business into other countries. With this trend of outsourcing, it is possible that the US could stop leading in business expansion; the businesses of other countries will be growing. We could also lose our leadership in technology; that leadership is not necessarily static or guaranteed.
ReplyDeleteEven though America is starting to lose some of it's power in the world economy, it is losing it's strong hold very very slowly. American companies still lead in business and technology. I really agree with Warren on this subject, America is still definitely in the spotlight and will be for a very long time to come. I want to stress though, American companies are still going to come up with new ideas and possibly new industries which well shot us forward. I think this is already clear in the green technologies about to florish. Lots of those ideas are American, and will continue to gain momentum. No matter what happens in the coming years, I don't think this will have any huge impact on our influence in a while.
ReplyDeleteI personally believe that the U.S.'s influence could degrade, but not to a point where it would be a major change. Yes, many other countries are producing more things then the U.S. and coming with better technology then the U.S., but the U.S. is also doing the same. You see U.S. products all around the world. Like Eddie said, we are losing our influence, but it is happening very, very slowly. I do not believe we will fall from the top in next couple of years, but it may be possible in the long run.
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