Scotland’s historic vote on independence was wrought with international implications; from foreign policy, diplomacy, international trade and more, the prospect of an independent Scotland raised numerous questions about how all parties, not just Scots, would be affected by the potential change in governance.
Financial experts in the U.S., like CEO of Bennett Group Financial Services Dawn J Bennett, were quick to wonder how this vote for independence could negatively impact the U.S. economy. Leading up the September vote, American investors had pulled out almost $30 billion in UK assets, while Scotland’s potential succession sparked the foreboding possibility of a chain reaction among other dependent nations. Such a movement could ultimately result in global economic destabilization, which the U.S. and Europe, still largely in the throes of a recession, would be ill-equipped to handle.
Bennett noted that she believed Scottish independence would undoubtedly be a risk to financial markets across the globe, especially the fragile U.S. economy. Even more problematic was the fact that should Scotland vote for independence, the Federal Reserve would have little power to save the U.S. economy, as its current attempt at economic stabilization, infusions of cash, have proven ineffective. In fact, the Fed itself has stated that, “What monetary interventions have failed to accomplish is an increase in production to foster higher levels of economic activity.” The Federal Reserve also admitted that what monetary infusions have done instead, is widen the wealth gap between 90 percent of the American public and the top 10 percent of the nation’s investors. What should this communicate to the average American? In short, that the monetary infusions of the past five years, all of which have been in an effort to pull the U.S. economy out of a recession, have been of no value. Yet, we continue to hear in the media of economic recovery and stabilization.
This disconnect between the actual stability of the U.S. economy and general perception of its health is evident in other financial indicators. In December of 2014, the national debt reached an all-time high at 18 trillion dollars and continues to increase, while the consequences of harboring such massive debt are left largely undiscussed or touted by politicians as being manageable given that a significant percentage is “owed to ourselves.” Even the disparity between portfolio values and stock markets like the DOW and NASDAQ should be warning signs that the economy is approaching a dangerous precipice. How can large companies perform so poorly, yet stock markets boast such exceptional numbers?
Scotland voted against independence on September 19th of 2014, effectively eliminating—for now— worries of a global economic crisis. Yet despite this outcome, this geopolitical situation helped underscore an alarming reality: the U.S. financial market is far more vulnerable than we acknowledge, and should the Federal Reserve continue to prop up our stock markets and engage in ineffective cash inflows, it may not take a major disruption in international policy to thrust the U.S. into financial calamity.
Bennett Group Financial Services LLC, based in Washington, D.C., is a comprehensive financial services firm committed to providing opportunities to clients’ as they seek long-term financial success. Its customized programs are designed with the potential to help grow, lower overall risk and conserve client assets by delivering a high level of personalized service and skill.
For more information, call 866-286-2268 or visit http://www.bennettgroupfinancial.com
Securities offered through Western International Securities Inc. (WIS), member FINRA/SIPC. BGFS and WIS are separate and unaffiliated entities.
About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com
She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.
She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett firstname.lastname@example.org