Will the United States Get Blacklisted as a Tax Haven?
November 21, 2016
Show all

US Dominates as the Global Financial Safe Haven

Money is pouring into the major investment centers the United States from all over the world.

Friends of mine in the wealth management business from New York, Chicago, Miami, Houston, Dallas, San Francisco, and Los Angeles tell me they are opening lots of new accounts.

I was just in Brooklyn this past weekend for an international meeting. As I was being driven around I saw new building project after new building project. “What is driving all this new construction and rehab of old buildings”, I asked.

I was told that it’s nearly all from foreign investors or for non-US persons coming to live here.

From personal experience, I can tell you the same is true for Miami.

While most of this new money is not affecting directly the heartland of America all that much, it does directly affect the economy as a whole.

The United States has for many years now been the dominate financial haven in a world that competes heatedly for capital investment.

Despite our internal politics which far too often is at odds with what would be in the best interests of the United States, people worldwide with financial mobility unquestionably recognize that the U.S. is the safest country for financial security.

The reason for this is two-fold.

The rest of the world is heading into a bad place. Some worse than others. While the United States maintains a financial environment which is the most attractive among all the other countries of the world combined.

For many years, China had been touted as one country but two systems. The investment industry convinced itself that a communist run country could also support a capitalist system.

They misunderstood that every country uses capital and therefore is a capitalist country. The difference is how the capital gets allocated.

In China, no matter how you look at it, ultimately capital is directed by the Communist Party to achieve their goals. Part of their goal is to create jobs and grow industry and trade. But that goal is always subservient to the primary object of communism to stay in power.

Unlike the United States, China does not have the basic building blocks to sustain its economy without significant political upheaval. The Chinese entrepreneurs with built up some financial resources have been moving it out of China to diversify their financial risk exposure.

The communist lead Chinese government recognizes the danger this poses and is cracking down hard to stem the losses.

Where is this money going?

A goodly part of it is coming from the United States.

The same is true for Africans, South Americans, Middle-Easterners, and from the Western countries including the EU.

I have characterized this numerous times by saying metaphorically that the world is one crappy neighborhood but the United States is the best house and most people want to move in.

The United States is the only superpower in the world. It is the largest energy producer, largest agricultural producer, largest manufacturer, and its economy is constantly expanding because it annually has more immigration than all of the other countries of the world combined.

With this last election, America will have a uniquely lead government. That is a government run by successful people from the private sector and not groomed through the political process.

The United States operates under a set of principles that do not exist in countries which are predominately communist, socialist or otherwise run by monarchies, dictators, despots, and thugs.

Yes, the United States has faltered in the past decades with led up to it now being collectively at economic risk and individually at losing fundamental personal freedoms. The operations of the free-market have been hindered, since at least the 1930s and the New Deal, by government intrusion and outright manipulation.

But the basics of what has historically made the United States an offshore safe-haven and a tax-haven for the rest of the world is still in place.

The United States, fortunately, is the beneficiary of one other additional factor making it the continuing super-power globally.

The election of President-Elect Trump is a demonstration of the will of the people to reject the socialist policies of its prior Democratic and Republican leadership. Despite the totalitarian instincts of the ruling political establishment to retain power at all costs, the United States follows the rule of law. The result was the most remarkable political achievement in modern times.

In this election, the people’s will has won out over the political ruling establishment.

There is new leadership, rather strong-willed leadership, which is already taking the United States back to its successful roots. The people voted their displeasure recognizing that government is the problem and leadership by private industry the cure.

Until other countries likewise change, they will have little chance to effectively challenge the United States as the dominant safe-haven to the world.

Leave a Reply

Your email address will not be published. Required fields are marked *