I was recently in Stockholm, attending the world’s largest stamp conference and show. You’ll be hearing plenty about the event over the next few weeks — it truly was an eye-opening experience.
But that’s not what I want to talk about today.
No — today I want to face an uncomfortable truth — one that comes up every time I travel and get to see what the rest of the world is up to. It’s eye-opening in a different way.
The U.S. is run-down. It’s a problem.
When I pulled into Stockholm, I got on a high-speed rail line that took me into the city center in under 20 minutes (a similar distance in the U.S. would take an hour, assuming no traffic).
The round-trip ticket on that train, incidentally, cost less than the one-way Lyft I took to the airport in the U.S.
Once in the city, I grabbed a metro card. For around $35, I could travel anywhere I wanted for a week — in clean train cars passing through subway stations that have often been compared with works of art.
The card system itself is contactless — just hold it near a reader and away you go. Or just use your smartphone!
The streets of Stockholm are clean and bright. Most are devoid of cars, which are limited to a few main thoroughfares. The buildings that line them are new and gleaming.
Even the graffiti in Stockholm seems thoughtful and planned.
It makes the U.S. seem second-class by comparison.
And if you think this is all because of government subsidies from the quasisocialist system of Sweden — well, commerce is just as far ahead.
Fast-food restaurants throughout the city have automated tellers taking orders:
And 7-Elevens have real food options — complete with pleasant outdoor seating:
In ways both large and small, it feels like the world has passed us by. The U.S. is no longer the commanding force it once was.
Now, to be clear, I’m not trying to be overly harsh on the U.S.
We are still the richest nation on Earth — with the most strength any nation has ever possessed.
But thanks to some quirks of history, it doesn’t always feel like it. There are a few reasons for that…
We’re No. 1 — But Sliding
When World War II ended, the U.S. was responsible for half the world’s GDP.
But it couldn’t last. We wouldn’t want it to last — that sort of imbalance breeds greed, wars and destruction.
Today, the U.S. has just under 25% of world GDP. (China at No. 2 has around 14%.)
And when you measure GDP per capita by purchasing power — basically, how far any one citizen’s money goes — we’re somewhere between 10th and 13th place, depending on who is doing the measuring.
Still very strong — but places like Ireland, Switzerland and Norway consistently do better.
Meaning citizens in those countries feel richer. And you can see that in the services and infrastructure they enjoy.
We Built Decades Ago
The U.S. has had a few infrastructure booms:
- We built a massive train system in the 1800s. It was easier and faster then because we were building through virgin land
- Many of our cities shot up in the 1920s — the buildings from those days still dominating skylines (think the Empire State Building). There was another boom in skyscrapers and the like in the 1970s
- Then we built the interstate highway system in the 1950s — and poured millions of dollars into several expansions since
- And of course, the internet infrastructure boom that consumed the late 1990s and early 2000s.
Simply put — our infrastructure is old. Much older than most others throughout the world.
After World War II, Europe had to rebuild basically everything. You’d be hard-pressed to find a major bridge that predates 1945.
The Brooklyn Bridge, by comparison, was started in 1869. That’s not unusual in the U.S.
Both the age and lower-quality materials used make for major issues. And though we repair over time, there’s no substitute for new construction.
Asia is even better off in this regard…
Japan was leveled in World War II and too poor to do much building for years after. But by the 1980s, it went on an infrastructure boom — when high-speed rail had already been invented.
China started even later — and consequently has even newer, more technologically advanced infrastructure.
Other parts of Asia — like Thailand and Vietnam — are still in the process of joining the rich world. When they get serious about building out infrastructure, it will be even more impressive.
None of this is the U.S.’s fault. It’s simply a fact — our infrastructure is worse than the rest of the world’s because it’s antiquated. We can change that — we’ll have to sometime soon — but it’s a difficult, expensive, time-consuming process.
If you’ve ever renovated a house, you know it’s a whole lot easier to build something new than improve something old.
It’s worth it in the end — poor infrastructure has a direct cost in lost GDP — but because the costs are hidden, they’re easy to ignore.
I bring all this up for one simple reason.
If you think investing only in America is the best strategy, you’re nuts.
Make no mistake — the U.S. still has the largest and strongest economy in the world.
But the gap is smaller than you think. And the U.S. economy faces hurdles that others don’t — like the sandpaper effect that comes from aging, crumbling infrastructure.
To keep your money safe, you can’t put all your eggs in the U.S. basket.
You can’t put all your money into stocks, either… The old saying is true: When the U.S. sneezes, the world catches a cold. Stock markets around the globe move almost in lockstep — you get no diversification protection from them.
Instead, you want to own international assets. Things like rare, valuable collectibles (like the stamps I went to Stockholm to see) or real estate.
Take a trip and walk around any other first-world country and you’ll see why… the U.S. is currently lagging.
We will catch up — a massive modernization project is inevitable.
But until that happens, every trip outside the U.S. will feel like a trip to the future. And any money invested outside the U.S. will be a wise hedge.
Editor-in-chief, Unconventional Wealth
P.S. The most international asset, without doubt, is real estate. It can’t be brought home, repatriated or moved around. It’s the ultimate hedge against any problems in the U.S. economy. And thanks to our friends at Real Estate Trend Alert, you can purchase international real estate in some of the most desirable locations in the world at a massive discount. Get started here.
Ryan Cole is the editor-in-chief of Unconventional Wealth. He’s been covering the alternative investment space for nearly a decade and writing about finance and investment for almost 20 years.
Ryan has walked the walk for years, living a very unconventional life. He’s led snowmobile tours through the mountains of Colorado, settled in Japan for five...