Monday, 7 October 2013
Whilst Bureaucrats Bicker Economies And Markets Suffer
Take for example the ridiculous and, in my mind, unnecessary political stand-off in the United States. The government shut-down that has resulted there, is costing the American businesses and economy upwards of $300 million per day. That figure only speaks to the monetary losses suffered by the United States, it says nothing about the adverse effects it is having on international investors' confidence. Let me just say that as stocks in the U.S. keep falling, so does investor confidence. And, if politicians do not swiftly address the investment community's rising concerns, the consequences for the American economy and international investor outlook will be more than just “unfavorable.”
Whilst the bureaucrats bicker, economies and markets suffer. It would seem that because of this, it has become increasingly important for investors to include political influences on their checklist of investment risks to be constantly aware of, when choosing their path to long-term investing success. Aside from unforgiving bankers and greedy stock and bond traders, investors can add political unrest to their list of perils to avoid when seeking safe and steady returns.
The fact of the matter is that the radical positions taken by U.S. lawmakers has seriously weakened the super-power's economy, but done very little to strengthen their own political agenda. While officials continue to hold the economy and investments hostage, American investment options will grow less and less appealing, prompting investors to instead seek investment alternatives in appealing emerging markets.