The U.S. Is No. 1 (But There’s Trouble Brewing)
Alex Moschina|September 25, 2024
You can say a lot about the state of the U.S…
And a lot of folks have…
But we’re still the strongest nation on Earth.
Ray Dalio thinks so, anyway. The ultra-rich founder of the world’s largest hedge fund recently unveiled the 2024 edition of his “Great Powers Index.”
It ranks 24 major countries based on the following:
- Level of strength
- Level of health
- Level of happiness
- Projected economic growth prospects.
For “strength,” Mr. Dalio considered not just financial strength but education and military capabilities as well.
As the table below shows, only China – our biggest rival – comes close to the U.S. in terms of total strength. But looking ahead… the numbers aren’t so pretty.
While Dalio’s analysis suggests U.S. growth will be slow over the next 10 years, China, India, Turkey, Indonesia, and Saudi Arabia are all expected to grow at an above-average rate of at least 4%.
India shows the most potential, with Dalio projecting 6.3% growth between now and 2034.
From the report:
Based on our economic health index, we project that the United States’s real growth rate over the next 10 years will be in the vicinity of 1.4%. This growth rate is somewhat below the global average, ranked 22nd out of 35 major economies, and 4th out of 17 developed countries.
The biggest ding on our potential is debt. “The United States’s indebtedness position is worse than other countries,” the report notes, “ranked 33rd out of the 35 countries we look at.”
It’s no surprise. As I write, U.S. national debt hovers around $35.4 trillion.
Things don’t look much better down at an individual level, either. As Shah mentioned on Friday, U.S. consumer debt hit $17.8 trillion in the second quarter.
“These figures paint a bleak picture of American consumer finances,” he wrote. “If spending slows or hits a wall, the economy could follow suit, creating a vicious feedback loop.”
So, crippling national debt… crippling consumer debt… and, let’s not forget, borrowing rates that are still near multidecade highs.
According to Dalio’s assessment, things are okay for now. But trouble may be brewing.
Of course, he’s not the only super-rich guy making bold statements about the fate of our nation.
As Robert wrote in yesterday’s issue of Total Wealth, JPMorgan Chase CEO Jamie Dimon is back in the news after declaring that stagflation could soon ravage the U.S.
“I wouldn’t take it off the table,” he said last week at the Council of Institutional Investors in New York.
But before you panic… it’s important to remember that Mr. Dimon has made proclamations like this before. Many times.
And he’s been wrong…
Many times.
In case you missed it, Robert shared some examples of Dimon’s past “boy who cried wolf” moments… and provided the reasons for his more optimistic perspective here.
Only time will tell which – if any – of the year’s high-profile predictions will come true. But as Shah recommended on Monday… the best thing to do right now is to lean into the positive.
We’ll take the rest as it comes.
Alex Moschina
Alex Moschina is the associate publisher of Manward Press. A gifted writer, editor and financial researcher, Alex’s career in publishing began more than a decade ago when he worked at one of the world’s leading providers of academic research and reference materials. Alex first cut his teeth in the realm of investing when he joined the team at White Cap Research in 2010. There he was charged with covering emerging market trends and investment opportunities. A stint as senior managing editor and editorial director at the prestigious Oxford Club followed. A frequent speaker at conferences and events, Alex has led educational workshops across the U.S. and Canada.
