The whole world’s going nuts, but events are strangely conspiring to drive business to the U.S.
I was still basking in the uplifting e-mails I reported in “February Readers Respond.”
It was generally positive stuff, and basically consistent with numbers I was seeing.
Except for the part where the whole world started going on “Tilt.”
I promise, this has a happy ending, but really…
The World Goes On “Tilt”
Unrest continued its spread across Northern Africa and the Middle East in February.
Egyptian President Hosni Mubarak was run out of office on February 11.
U.S. equities started rolling over in late February, eventually dropping 7% in a month. (The indexes regained half that loss.)
March 11, Wisconsin Governor Scott Walker signed a controversial law restricting the collective bargaining of the state’s public employees.
On the same day, Japan got whacked with a 9.0 earthquake, a tsunami, and a nuclear emergency.
(We believe there is no connection between the two.)
March 16, the Producer’s Price Index was released, announcing that inflation remains tame, except for the part where food and gas prices are going completely nuts.
March 19, the “Super Moon” phenomenon served up the “biggest, brightest moon since 1992.” The close proximity of the moon also re-introduced the lunacy explanation for world affairs.
March 20, the U.S. backed into another undeclared war, protecting something-or-other in Libya, for an unspecified period, under seriously conflicted objectives. Words like civilians, rebels, and oil occurred in various commentaries.
And, of course, in times of crisis, we always have the U.S. Dollar. Unfortunately, “the world’s reserve currency” is now trading at a 15-month low.
Here’s what I would offer: Despite the generally wretched scenario, almost everything is conspiring to drive business to the United States.
We may not deserve it, but take a look…
Manufacturing has been coming back to the U.S. from China for some time, now.
Japan will lose some production. That work will go where it is most appreciated.
Africa and the Mid East are not my picks for new factory construction.
Trashing the dollar – which isn’t fooling anyone – does make our relative prices seem lower.
Does all this feel awful? Yes, actually. Tuesday’s Rasmussen Report says, “Americans are now showing less optimism for long-term economic recovery than ever before.”
Is it fatal? It doesn’t have to be. A balanced federal budget would be nice. Rule of law would be reassuring. There is no shortage of energy whatsoever.
And, as I said, the U.S. is seeing new opportunities for business, whether we deserve them or not.
Think about it. How many places in the world would you really want to go build a factory right now? Far easier for companies to manufacture here, where there’s a little bit of safety, and then ship products overseas where the demand is stronger. That works, if you are highly automated.
The Rail Freight figures are doing fine. That’s domestic. The Baltic Exchange Dry Index is awful. That’s international.
How do we confirm these conclusions? Unemployment figures are declining, and I have real, live searches I’m working on right now.
Stay close. I think we can do some good.