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The best explanation of the US economy I’ve heard

At least twice a week I get recommendations in my inbox to invest in US property and for the last 2 years I’ve been writing blogs explaining why I would avoid investing in the US at present.

I recently wrote an article explaining how the American property markets are sinking.

Today I’d like to share with you something I received in an email that’s the best (and simplest) explanation I’ve seen on what’s going on in the US economy.

Look at it this way…

– U.S. tax revenue…….    $2,170,000,000,000

– Federal budget……….    $3,820,000,000,000

– New debt………………    $1,650,000,000,000

– National debt………….  $14,271,000,000,000

– Recent budget cut…….       $38,500,000,000

 

Now, let’s remove 8 zeros and pretend this is a household budget…

– Annual family income…………………..   $21,700

– Money the family spent…………………   $38,200

– New debt on credit card………………..    $16,500

– Outstanding balance on credit card…  $142,710

– Total budget cuts………………………….         $385

This put things in perspective, doesn’t it?

Not the ideal household budget is it?

Just to make things clear… I have long term confidence in the US and its level of entrepreneurship and the American economy will eventually rebound. It is expected that the number of millionaires in the US will almost double in numbers by 2020.

And while there is not “one” US property market, most are in the doldrums, especially the low end ones that are being promoted to Australian property investors.

After considering cash flow, capital growth, tax implications, financing options, the currency risk and all other factors, investing back home has a better chance of being more a profitable, more predictable and more manageable option.



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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


'The best explanation of the US economy I’ve heard' have 1 comment

  1. Avatar for Property Update

    September 21, 2012 @ 5:52 pm Brian Linnekens

    Very informative post. Thanks for sharing.

    Reply


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