Dateline: San Francisco, California, United States
Economic isolation is the kiss of death for an economy. Sometimes, it happens slowly. Other times, it happens all at once. But isolating oneself from the rest of the world economically is never a good thing.
I’m here in the United States for the next few weeks wrapping up a few old business projects and exiting more of my US financial accounts.
To be honest, if it weren’t for nearly one hundred people attending our Passport to Freedom event in Las Vegas next week, I likely wouldn’t be here. It takes sharing a stage with Peter Schiff, Jeff Berwick, and about ten other gurus I admire to get me back here these days.
And there’s a simple reason why: the United States has no clue what’s going on in the rest of the world. And they don’t care.
They are perfectly willing to let the ship go down, as long as they can claim they are right until their last breath.
Just getting in to The Land of the Free is quite a spectacle. A few weeks ago in the Philippines, I tried to take a photo of a sign that warned against joking about having weapons on your person. The penalty for doing so could be five years in prison… or a fine of about $950.
The guy at the airport told me not to take a photo, and easy relented and moved on when he realized I wasn’t causing a problem.
In the United States, things are much more difficult. Even though I sold my soul and joined the US Global Entry program to expedite my entry into the country, I wasn’t able to use it because of some sort of malfunction. Nothing like paying $100 (or, in my case, United Airlines paying it on my behalf) to a bunch of bureaucrats who let the very equipment you’re paying to use go to seed.
It almost feels like being in the Soviet Union.
So rather than heading right through immigration and customs, I got to stand in a long line where guys who get paid to stand around and act tough shouted orders at all of us to move faster, fill in the gaps, and stand up straight. No one has any sense of humor. No one says thank you. No one respects travelers.
The thing is, many of the passengers on my flight were residents of South Korea and other Asian countries. For some, this may be their first trip to the United States. Seeing how they are treated with such disrespect, I certainly hope it’s their last.
Just watching the television in the airport lounge tells you all you need to know about the US position in the world. It seems almost every news story is decrying Iran for its nuclear program, or Romania for playing home to data hackers, or China for some manufacturing snafu.
If you believed everything you saw on American media, you just might curl up in a ball and never want to leave your house. It’s sad that that’s exactly what some people are doing.
On the flight back, I got a chance to re-read Jim Rogers’ book, Adventure Capitalist. I’ve been a big fan of the book since it came out, and it’s an early treatise on the virtues of Nomad Capitalism.
One concept laid out in the book is economic isolation – and how it has killed once great economies.
For instance, Burma – now Myanmar – was once one of the wealthiest economies in Asia. Then, it all fell apart. In 1962, the military took over and declared, “we don’t need the rest of the world”.
The same was true of Ghana after it declared independent from African colonialism.
Albania spent much of the 1970s and 1980s as an isolated communist state, where citizens had few freedoms and certainly few economic freedoms.
Of course, communist China closed its communication channels with everyone but the Soviet Union under Mao, but quickly realized how its plans to be entirely self-reliant had no chance of succeeding with their backward model.
Today, the United States has established a sort of financial imperiousness that is weakening its position as a global economy.
Like any of the failed government policies above, this can only spell bad things in the future, as the ability of any one country – the United States included – to bully every other country on earth is limited.
The United States is one of the most difficult countries for most foreigners to enter. Friends of mine carrying passports from countries like China, the Philippines, and Vietnam routinely speak of subhuman treatment at the required visa appointment at the US Embassy.
Meanwhile, the US government is following that lead and making more and more laws to make more and more things more difficult. Investing in the country is becoming more difficult. Getting your money out of the US is getting more difficult. De facto capital controls like FATCA are just the beginning.
Meanwhile, the NSA is spying not only on Americans, but on the world. The entire planet is disgusted by the whole thing.
The US government’s answer to all of this is…
…more of the same.
After all, the nature of American imperiousness is that it’s everyone else’s fault.
The US government continues to claim terrorists hate them for their freedom while they destroy the last vestiges of freedom the country has left. Somehow, terrorists aren’t destroying buildings in Singapore or Zurich or Santiago.
The attitude in the United States is simple…
If you don’t like the rules, tough.
If you don’t like our economic policies, don’t bank or invest here.
If you don’t like the way you’re treated, take a number.
If you don’t speak English, get out.
If you don’t think this is The Land of the Free, leave… you anti-American jerk. You almost wonder if they should throw in, “oh, and you smell, too!”, just for good measure.
The truth is, more and more people realize they DO have other options. Bullies can’t survive forever, and there is always someone trying to build a better option for people to use.
That is exactly why the US is sinking in global relevance. And it’s exactly why the US dollar will one day become obsolete.
Rather than listening to reasonable criticism the way the world’s new safe havens do, the US has decided to plug its ears and pretend they have nothing to learn from the rest of the world.
Economic isolation at work. And since no country is an island in today’s global age, it will lead to their downfall.
Just the other day, the Heritage Foundation released its annual Index of Economic Freedom. While I don’t agree with everything the Heritage Foundation does, or every point they make in this annual survey, I do agree with the trend.
Economic freedom in the United States is decreasing.
Since last year, the US fell two places to twelfth place. It is now behind the usual suspects like Hong Kong, Singapore, and Switzerland, but also behind emerging nations like Estonia and Mauritius.
Even Denmark has more economic freedom than The Land of the Free, and they’re a tax-and-spend socialist state.
If the index was based on the actual amount of freedom available to small entrepreneurs, I believe the US would rank much lower.
As much as Vietnam or Paraguay may claim restrictions on this or that, the reality on the ground is much different if you’re not a huge corporation. You can decry Egypt’s tax policy all you want, but the Egyptians are far less afraid of their tax authority than Americans are of the IRS.
While the US is still well connected thanks to its long status as home of a reserve currency, that is changing. None of the economic success of the United States has anything to do with the US government anymore. It’s merely an exercise in timing as they run out the clock.
I’m fond of saying that one day in the near future, Paris Hilton’s heirs will be bankrupt. She and her descendants will have no idea just what created the fortune they’ve enjoyed, and because they believe it will never end, they’ll have no desire to replicate the process.
The United States is the Paris Hilton of countries. Once great and now running out the clock.
They’ve cut themselves off and said they don’t need the rest of the world, because they’re number one.
That position is not true now, and it will be even less true with each passing year. Will you keep your money tied up in the decay?