Time to Leave?

It was reported last week that Jim Rogers is bullish on gold and skeptical of the economy of the United States in general and of the dollar in particular. He is said to believe that the bull market in commodities has a while yet to run. He may be right on all counts.

If he is right on commodities, it is more trouble for the United States, since our taxes, regulations, and "green" policies make it harder and harder to increase the production of commodities of all sorts in this country. (Imagine what it might take to get our civil servants’ permission to open a new lead mine in the US. The feds are even working to make it harder to produce agricultural commodities. ) As commodities become more valuable, and as we disdain to allow their production in this country, we become poorer.

I likewise share his (and many other people’s) concerns about the dollar. It seems likely that the huge increases in the money supply, abetted by the massive federal deficits, will produce significant price inflation. Indeed the deficits give the government a real incentive to inflate to partially repudiate its debt. In general, under both Bush and Obama, the government has been a disaster, and things appear to be getting worse.

I also agree that there are real problems with our culture with far too many lacking prudence, self-discipline, responsibility, self-respect, a “work ethic”, and even basic human skills and decency. There is plenty of reason for pessimism.

However I worry about Mr. Rogers’ solution of moving to Singapore and about the plans or hopes of others to avoid the mess in the United States by becoming expatriates. If this country rights itself in the next few years (and I think it will to a tolerable degree), there will have been no need to leave. If it does not, but rather continues to decline, I would think that a person wouldn't want to be an expatriate American in Singapore or Taiwan or anywhere else in east Asia on the day the United States Navy stops guaranteeing the security of the Pacific. Things may get pretty rough here, but they could be much worse there.

When Europe collapsed into war, tyranny, and decline under the Communists and the Nazis, many Europeans sought refuge in the United States. Later, Cubans and Vietnamese did the same thing. For all their sorrows, these refugees were lucky in one important way. They had someplace to go. The sad fact is that we may not. It is hard to see how Singapore or Australia or New Zealand or Costa Rica or any other place I can think of will be safe or pleasant for long if the United States declines into insignificance. The best option, even if things get really bad, may be to stay here and struggle to set things right here.

I know that there are other possibilities besides recovery and deep decline. For instance the United Stated could remain the dominant military power while progressively becoming a less free and less pleasant place to live and work. In that case becoming an expatriate might work well. However, if I were such an expatriate and were either young or a parent, I would question whether that condition was stable for the long term. I would stay alert and light on my feet. Of course it may be that the easy times are over for a while, and we all need to stay alert and light on our feet, no matter where we live.