Be Careful What You Wish for

The U.S. economy has been the brunt of a lot of bad news recently. Take a look at the Wall Street Journal or just about any other popular source for financial information, and you can see reports of doom and gloom for the future of the American economy every day.

Heck, it’s a major subject lately for us here at PROFIT CONFIDENTIAL, too. Of course, the U.S. economy is an important topic, as it really affects every person in North America, including our Canadian readers. Thing is, however, that while the reports often make it seem as though the U.S. has the weakest economy on the planet, that’s really not the case at all.

Take European countries, for example. What American hasn’t dreamed about strolling carefree down the Champs Elysées in Paris or taking in the grandeur of the Piazza San Marco in Venice? To a lot of today’s Americans, Europe has become the place of dreams, where you can leave the hustle and bustle of the fast pace of U.S. cities behind and indulge in siestas, fine wines, extended lunches, and cruises in the countryside in luxury cars.

Truth be known, Europe has been facing its fair share of economic issues itself of late.

Last week’s European headlines showed several dark clouds looming over the EU economic horizon:

— French voters quashed the new EU constitution — The Netherlands voted “no,” too — The Euro is down 9.3% this year — Lehman Brothers and Goldman Sachs have reduced their forecasts for the Euro this year — EU stock prices have been in decline — Germany and Italy face record unemployment — Italy is dealing with a possible recession — Disappointing growth forecasts have been seen in Finland, the Netherlands, France, and Belgium — Manufacturing in Europe is weak because of the high prices for fuel and raw materials

In a Bloomberg article last week, I read that “these developments carry a heightened risk of a possible global financial crisis down the road.” Columnist John M. Berry is right–there are a lot of worries these days about the global economy, not only in North America, but also well beyond its borders.

Nowadays, every developed nation on earth (China aside) seems to be experiencing financial setbacks.

Are unemployment, mounting struggles with debt on a government and individual level, weak currency valuations, and fears of inflation signs of the time the world over? Sure are.

Is a collapse of the world economy inevitable?

No. I don’t believe so, anyway. To see a positive future, however, we need to see governments step up to the plate, take responsibility for their actions, and put real measures in place to protect our economic future and the future of our children.

So, am I dreaming of a European vacation these days? Not at all. I’d rather spend my time here in Toronto, focusing on how my everyday spending habits really affect the global economy. To those of you who continue to believe that the rest of the world has it better than you do, be careful what you wish for.