Ever since the so-called Liberation Day, the list of things that Americans would be “Liberated” from has gotten longer and longer…
The trade war and tariffs would surely liberate us from the trend toward lower inflation, full employment, falling mortgage rates, investment in manufacturing and solid GDP growth. Just today, the OECD lowered its forecast for U.S. GDP growth to 1.6% largely due to the impact of tariffs…
Some will say the entire concept of American Exceptionalism is being undermined. With its renewed emphasis on defense spending, Europe is now the place to be for economic growth. So investors are “Selling America” and moving their funds to the Eurozone where money will be treated better…
And there is cause for optimism about the EU. If Germany and the rest really do start spending money on defense, it could be the start of a virtuous cycle. Defense spending is a bit like any other economic stimulus: the government spends money on research and manufacturing, new jobs are created, newly employed spend more money, the tax base rises (Lord knows the EU loves their taxes!) – plus, the benefits of defense research cannot be understated. The internet itself started as a military project…
And despite Eisenhower’s warnings about the military-industrial complex, there’s no doubt that the U.S. economy has benefited from the massive defense budget.
It’s honestly a bit shocking that it’s taken Europe so long to figure out that raising defense spending could be just the kickstart those economies have needed…
But I’m going to stop a little short of saying the age of American Exceptionalism is over and the time of the EU has come…
Sure, President Trump has a knack for ticking off everybody in the entire world, except for his most loyal voting base. But when you buy U.S. stocks, you’re not buying the president. You’re buying a stake in the best-run companies in the world…
Maybe that “Sell America” trade is about to reverse.
Turns out that was a pretty good spot to buy stocks. The S&P 500 is up over 500 points since…
So Hammer sent me a chart today that inspired to make that Orc meme:
This isn’t meant to make fun of the EU’s significant underperformance (well maybe a little). But for the last 15 years, it’s been a pretty one-sided trade. And if it weren’t for the internet bubble and 9/11, the streak would certainly be longer…
I have no problem with a little catch-up from the EU. And there are certainly some quality EU stocks to own…
But anybody telling you that the Age of American Exceptionalism is over has probably been “liberated” of their sense.
Take Care,
Briton Ryle
Chief Investment Strategist
Outsider Club
X/Twitter:https://twitter.com/BritonRyle
