Why The U.S. Needs To Be Like Asia

by Tim Staermose

May 10, 2011
Manila, Philippines

Reading the local papers in Manila today, with their blaring headlines celebrating the latest boxing conquest of Filipino boxing phenomenon Manny “Pacman” Pacquiao, I couldn’t help but be struck by the symbolism.

Here’s a guy who grew up dirt-poor, in one of the poorest parts of a poor country, wiping the floor with the latest in a long line of fancied American contenders. Once again, Pacquiao showed he is without a shadow of a doubt the best “pound for pound” fighter in the world.

I don’t pretend to know enough about boxing to provide an informed opinion on whether it was a close fight, or whether the challenger, Shane Mosley, was ever going to be up to the task.

In fact, while the rest of the country was transfixed in front of large pay-per-view screens at venues broadcasting the big fight, early Sunday morning local time, I was in my office deeply engrossed in writing about my new 4th Pillar investment advisory, and why I think it offers something many of you will find valuable. (More on that another time).

Meanwhile, at the ASEAN heads of government summit in Jakarta, they all joined Philippine President Benigno “Pinoy” Acquino III in celebrating Pacquiao’s victory, no doubt taking pleasure in watching a poor southeast Asian boy made good completely dominate an American.

It’s really an appropriate metaphor for the way things are going in the world right now.

While the American economy struggles to muster up enough strength to even add enough jobs to accommodate the new entrants to the work force, out here in Asia the economies are going from strength to strength.

The Philippines, Indonesia, Malaysia, Cambodia, Singapore… you name it. They’re booming. With the exception of the basket-case that is Myanmar, the ASEAN region is on the up-and-up.

And unless some hard political decisions are taken in Washington — and I’m not holding my breath — just like Pacquiao did to Mosley, the fast-growing economies in this part of the world are going to keep eating America’s lunch.

Now, in fairness, many American BUSINESSES have got with the program. They’re at the vanguard of cashing in on the vast growth potential in this region of about 600 million upwardly mobile consumers.

I’ve just come from paying my bills at Citibank. I’m sitting in Starbucks, writing this on my iPad.

See a pattern here? Indeed, US exports to ASEAN were reported to be $68.4 billion in 2008, the latest year for which I can find data.  That’s on par with US exports to China at $69.7 billion that same year. The ASEAN region is also home to about US$150 billion of direct investment from US corporations.

This is why I’ve been saying to people that, just because the US may be in an economic funk, you shouldn’t discount the possibility that world-class American companies that get a high proportion of their profits from overseas will continue to thrive. And their stock prices could well go up accordingly.

We talk a lot about hedging your exposure to the collapse of the US dollar, and fiat money systems in general, by steadily accumulating precious metals with your savings. That remains a great strategy. But the best blue-chip US companies that derive a huge percentage of their earnings from the rest of the world are worth considering as well, for a part of your inflation-survival portfolio.


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