It is beginning to feel like the roaring 20s in America where the boom continues to rage with a new all time high this festive season.
Apple leads the pack at $1.3 trillion, more than the GDP of many countries, including Holland.
The two Googles together are worth more at nearly $1.7 trillion. The two Berkshires are now more than a trillion. Amazon is not far off from having its own trillion too. Microsoft is safely above it.
This boom seems to be isolated to only America where a huge tax break by Trump and trillions in more debt for gov appear to have fueled the stock market to a new glittering age.
Other stock markets are sclerotic. From UK to Germany, they all appear to only shout USA.
You can see the clear gains in US top left, rising nicely since 2017. The eurozone area as a whole is also doing ok, with some gain recently.
The rest, from China top right to Japan middle bottom, are hardly seeing much gain. China with UK are event at a bit of a loss since last year.
This discrepancy between US markets and all other markets has led to just two American companies, Apple and Microsoft, having more value than the entire German publicly traded economy.
There’s even room to add cryptos as Apple and Microsoft are at nearly $2.5 trillion, while German stocks are at $2.24 trillion.
The market cap of all cryptos is currently $190 billion. So even if we add this to German Stocks, Apple and Microsoft is still worth more by some $60 billion.
If we further add other prominent tech stocks like Netflix, or GPU maker Nvidia, just seven such stocks known as Fangman are worth more than the GDP of France and UK put together.
France and UK, the once great empires and still a formidable force in combination, are now just a fraction of the US stock market.
The March of the Tech Revolution
The above facts are stunning, and speak to how much the tech revolution has completely changed the world, and continues to change it.
In many ways this is a leap that is pulling US above the rest of the world just as the industrial revolution raised Britannia to new heights.
Europe in particular is playing catch up. It’s not far behind, but much of the innovation has occurred in America.
The reasons are many, but the most important one is that although USA spends a meager amount in Research and Development, it does still do so more than Europe as a whole.
A lot makes sense when you look at the above country ranking by R&D expenditure.
We zoomed out quite a bit, and still could barely fit Italy. No wonder they’re not doing very well.
United Kingdom at such low percentage is quite surprising, but perhaps not when you think of a decade of cuts in the isles.
That’s done no good for the economy, but the United Kingdom has the benefit of being almost merged with USA, so private tech enterprise is quite advanced, but not quite at US levels.
America is just different and it is different because comparatively it spends so much on Research and Development both as a percentage of GDP and in raw sums of half a trillion.
That’s a massive investment in science and the rest, while Europe as a whole is at a sclerotic 1.64%.
In addition, both US and China have the advantage of pulling resources, giving them both more precision and more volume.
Nationalism makes that a bit difficult in Europe, but the continent has to unite as both China and US is leaving it in the dust where the tech revolution is concerned.
IS Trumponomics Working?
If this was all just about the tech bit, you’d expect others to share at least a bit in this boom. One has therefore to consider whether Trump’s approach does have some merit.
Where China is concerned, they banned our crypto exchanges so we’re biased whether we want to or not.
The retaliation therefore by the United States with tariffs on Chinese goods is something we support. We’d even go further. We’d demand that at least a certain percentage of electronic manufacturing is done in the United States.
The reason is best given by Steve Jobs, one of the heros of this generation:
There is no chance the iPhone would have been invented by an American if computer manufacturing had began in China.
Yet America is sending all this knowhow to China. From chips to graphic cards and everything else. Thus it is now perhaps even more likely that the next big invention comes from China.
Things like electronics manufacturing can be a matter of national security, both in the raw sense and in the soft sense as in, if you’re left behind then it’s easier to kick you about.
That rebalancing of relations probably does have something to do with this stock marketing boom.
The danger is a lack of focus. In particular, the US-EU alliance should be strengthened, not strained. For that however it comes back to Europe needing to Unite.
Obviously on social matters Trump does not please. Many of those FANGs above were invented by immigrants.
The tax cut maybe had something to do with it, but that’s now being covered by a mountain of debt. Debt which is growing faster than the economy.
Yet, it appears to have kind of worked. Finally, America is now getting some new glittery skyscrapers. The stock market is booming. There’s hopefully peace now in the Middle East. There’s reason to think that maybe we will enjoy the new decade.
Britain in particular has some sense of optimism now if they do digitize the civil service and the economy. Europe has a new leadership at the top which may lead more to a continent wide view of resources. America is kind of feeling American again for once. So maybe it is time to say: let it boom.