Americans have been good at making assumptions--housing priceswould continue to spiral, Fannie and Freddie would never need agovernment backstop, borrowing increasingly more would never comeback to haunt us, and our major investment banks-managed byfinancial geniuses-- were impervious. One by one, our assumptionshave been knocked down.
Politicians and bankers have also posited that internationalinvestors would always continue to invest in Treasury bills andU.S. companies, because American is a safe haven and the mostpowerful economy on earth. We could afford to run up ournational debt--now over $10 trillion-- and our federaldeficits--this year $400 billion plus and about to balloon, becausethe rest of the world would keep pumping money into us even when welower interest rates to overcome economic weakness. The fail safeassumption is they have so much invested, they would only hurtthemselves if they stopped banking on us.
Some economists have warned for years we shouldn't be takinganything for granted and that one day the rest of the world couldview the U.S. as just a bad investment bet--sort of like a CDO fullof subprime debt. Why keep throwing good money afterbad? It's time to bail. Given our current condition that day may befast approaching. According to today's Washington Post sovereignwealth funds sit on the sidelines, having been burned byinvestments they made in various banks earlier in the year. TheGerman finance minister excoriated the U.S, in a speech thismorning for putting the entire world economy injeapordy and suggesting the U.S. has lost its financial marketprimacy.
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
