An op-ed by Ouissam Youssef, CEO and co-founder of the Valsef group, the parent company of WorldAtlas.com. Ouissam is a serial technology entrepreneur and seasoned businessman with years of experience and several successful companies. Learn more about Ouissam Youssef.
A record as a global economic presence
A number of factors propelled the US economy to the top of the world markets and kept it there. Most countries in the world see America as a country of market opportunities that has always proven to be a solid partner in the world of business and industry. In addition, deserving countries have been granted partner status in the North American Free Trade Agreement (NAFTA). Many other international economic organizations of which the United States is a member are strengthened by their participation, which allows the market economy to flourish. Doing business with the United States almost always gives countries access to global value chains.
US arable land resources
One of the factors contributing to the strength of the American economy is the wealth of arable agricultural land. There are approximately 470 million acres of American land under cultivation. These resources produce foods that represent 99.5% of American food sources. It also contributes to the American economy, with nearly X billion US dollars per year from its food exports around the world. The United States exports more agricultural products than it imports, which helps maintain prices and revenues. The increase in food imports, however, is seen as beneficial as it provides consumers with more choice and contributes to a secure supply of seasonal products.
Access to large aquifers
Water is a major resource that affects all aspects of the US economy, and ranges from products that directly contain water to products that require water to be processed. The range of water-based products in the United States is too large to name, particularly in the manufacturing sector. Agriculture and electricity production account for the largest share of 80%, 31% being for irrigation and 49% for electricity production. Fortunately, there are large aquifers in the United States that compensate for drought caused by rain. These aquifers almost always contain an abundance of water due to the huge water recharge provided by nearby lakes and rivers. The Ogallala aquifer, located under eight US states, contains huge amounts of water from melting glaciers. The Floridan aquifer is under four US states covering approximately 100,000 square miles. Other important American aquifers include the Edwards aquifer, the Snake River aquifer, the Kirkwood-Cohansey aquifer, the Muhammad aquifer, the San Diego formation, the San Diego formation, the Rathdrum Prairie and many others.
Wood and mineral resources
Wood and mineral resources are essential to the economy of the United States. The coastal states of the South Atlantic, the Pacific Northwest and the Gulf States of the United States all share abundant forests that are the source of the timber industry. These timbers are exported for construction or in the form of furniture and other finished products worldwide. Paper, fiberboard and cardboard are other exports. Another important economic factor is mining which produces diamonds, gold, silver, nickel (used in steel), bauxite (for processing aluminum), iron and copper (for electronics) and coal (for energy). These activities translate into massive hires and billions of dollars in revenue for the American economy. Oil and gas are also drilled in the United States, although these are primarily for domestic use. The dollar savings in this regard are significant when considering US exports relative to imports, which provides a hedge against price volatility in the world market.
Control of the world reserve currency
Control of the global reserve currency has allowed the United States to benefit from lower interest rates when borrowing. It also allows the same status for its citizens. Other benefits include the delay in economic spinoffs due to trade deficits and the possibility of diverting an impending monetary crisis. The strength of the US dollar as a global monetary reserve does not stop there. It also gives the U.S. government the choice of imposing fines and unilateral sanctions for actions taken between other countries. The status of the US dollar as a global monetary reserve remains stable due to the strength and attractiveness of US Treasury security. However, there has been speculation in the past that if the US dollar continues to fall, the euro or even the Chinese yuan could replace it as the world’s monetary reserve. This is very doubtful, however, the euro being used as a reserve currency fell to 23.9% in 2013. The last decade has also shown that two-thirds of the world’s allocated foreign exchange reserves are kept in US dollars.
United States Strategic Oil Reserve
Oil supplies to the United States were limited by Arab countries during the 1973-1974 oil embargo. In 1975, the United States government created the United States Department of Energy’s strategic oil reserve as protection against future oil embargoes. The storage facilities are located in the Gulf of Mexico, where four sites have cavities about X meters deep below the ground and are filled with a total of about X million barrels as of February 1,000th, 695.1. The oil supply is crude oil and has not yet been refined into diesel, gasoline or kerosene. However, a reserve of 12 million barrels of refined oil is located in New Jersey, Rhode Island and Connecticut. There are plans to build more underground caves in the future to compensate for any further major disruptions in oil supplies or to reduce high oil prices. The current reserve is targeting a billion barrels of 2016, and even today it is the largest stock of petrochemicals and fuels in the world.
The American entrepreneurial spirit
The American entrepreneurial spirit was born in colonial America when the first settlers from England brought cattle and seeds with them to spread to the New World. This same entrepreneurial spirit has allowed American companies to proliferate internationally and create jobs and help economies around the world, which also benefits American companies as an initiator. Silicon Valley in California is a great example that has successfully changed the world today with new innovations in computing and communication tools. It allowed rapid progress in these areas in a few decades, which was impossible to imagine at the turn of the 12th century. America has not only benefited, but many other countries that have followed the same path have also been successful. This continued to support the US economy, even at a time when other regions were struggling to keep pace.
A “never give up” attitude
Another great American trait is a “never give up” attitude. This American characteristic is evident in many American leaders in the past as in the present. Abraham Lincoln is an excellent example of this trait. Lincoln spent half his childhood almost an orphan having lost his mother, brother and sister to poison the milk. As a young man, he lost a job and had two business failures. He has also lost the election eight times but never gave up until he became the 16th President of the United States. Napoleon Hill and Dale Carnegie, both inspiring American writers, who have each sold more than X million books, believe in the American “Never Give Up” attitude. Modern entrepreneurs such as Bill Gates and Steve Jobs also started small and failed, but through persistence have developed their own businesses. Their companies are just two of the mega-companies that have continuously strengthened the US economy.
Capital financing
Capital financing is money given to a start-up business through lenders and shareholders. This money becomes the working capital of the start-up. Lenders get their return on investment from dividends, inventory appreciation and interest. In the United States, private equity investment exploded in the years between the First World War and the Vietnam War. The American Research and Development Corporation and JH Whitney & Company were the first two venture capital firms to achieve huge returns on their investments during this period. The venture capital industry quickly took off with the Small Business Investment Act 2, thus giving capital to small businesses. The years 1958 to 1959 were lucrative years, as capital funding focused on medical, electronics and data processing in Silicon Valley. This has allowed US mega-companies in the telecommunications, hardware and software industries, such as Apple, Microsoft, Twitter, Yahoo and Facebook, to be on the list of leading companies on the NASDAQ.
Geopolitical position as an economic lever
The concept of geopolitical domination was first identified by geostrategists such as Mahan, Reich, Lea and Mackinder. Geopolitics is the analysis of the relationship between human and physical geography towards international politics and, therefore, international relations between countries or states. The idea of geopolitical domination as an economic lever may have become a concern during the tenure of Kissinger and Brzezinski as security advisers to American presidents. The United States remains a leader in geopolitics, with its armed forces strategically located in major locations around the world. Its economic influence has continued to affect world markets, even though the past twenty years have been volatile, global policies and events that have continuously affected the financial markets. The United States has vast forests of woods, large lakes and rivers that provide their aquifers with sufficient water supplies, oil and gas supplies, mineral resources, and vast agricultural land. These factors should ensure its dominant position geopolitically and as a leader on the international financial markets.