I was privileged this week to attend a discussion presented by Jim Bowen, CEO of investment product company First Trust. With his boundless energy and entertaining style Bowen is always fun, but it is the scope of his material that leaves the crowd most inspired by the end of his talk.
The presentation’s theme involves the resurgence of America, on both the economic and cultural level, and makes a good case why the best days of America may in fact still be ahead of us.
I know it’s easy to be discouraged these days. With a stubborn employment market, a largely dysfunctional federal government and some fairly bizarre policy behavior from our central bank, the headlines are often scary and many times downright enraging.
But while the media is focused on American dysfunction, there are also some extremely positive trends occurring in our nation that a smart investor simply should not ignore.
Perhaps the most exciting of these trends is the emergence of the North America as a primary energy producer on par with Saudi Arabia and ahead of Russia. With the advancement of fracking technology and the development of massive shale oil and gas reserves, the U.S. is expected to soon be energy independent and in the near future actually become a net exporter of petroleum products. How amazing.
These lower energy costs, mainly in natural gas, are fueling a resurgence in American manufacturing activity. Bowen’s research references a recent study by Boston Consulting Group, suggesting the U.S. is steadily becoming one of the lowest-cost countries for manufacturing in the developed world.
The study estimates by 2015, average manufacturing costs in the five major advanced export economies Germany, Japan, France, Italy, and the U.K. will be 8 percent to 18 percent higher than in the U.S. While this analysis involves projections that may not be achieved, the fact we are making these comparisons is exciting for our nation going forward.
Even beyond energy and manufacturing resurgence, the U.S. continues to be blessed with resources not to be taken for granted. While we comprise only 4.5 percent of the population, our nation maintains 21 percent of the planet’s fresh water supply (China is about the opposite) and our agricultural system and great Midwestern soil is by far the most productive in the world.
With the advent of new technologies such as fracking, 3-D printing, social media and same-day product delivery (coming soon from Amazon.com), and the renaissance of an efficient and competitive manufacturing sector, America’s future can indeed be bright.
There certainly will be challenges, but it’s never been a good idea to bet against the American people, and perhaps this is the primary point Bowen was able to make.