Business Insider recently ran a poll on “What's the #1 thing you're worried about for the US economy?” Once I answered, it provided the current results. Here were the top 3 answers:
- A debt crisis in the US
- Gasoline prices
- A war in Iran
Here are my thoughts on those 3.
- I am not quite sure what this means. If we are referring to US public debt I have mentioned many times why I am not overly concerned now about a rise in Treasury rates or the inability of the US government to “fund” itself. If we are talking about private debt, then I think that has more to do with the mess in Europe spilling over here.
- This is a concern, but not at current levels. Check out this blog post from Econbrowser. You can see gas prices, while at the high end of the range over the last 6 years are not at the peak. Further, as a percentage of consumer spending on energy goods we are below the average since 1960.
- Above I said at current levels. A war with Iran would I imagine cause gas prices to sky rocket. So this would be a concern on many fronts, but the likelihood is hard to gauge. Recently a former Mossad head came out against an attack, but there are also articles making an attack seem imminent. The more imminent an Israel military mission looks, and the more economic pressure applied, the more likely Iran is to find some diplomatic solution. This is nearly impossible to handicap.
What are my top 3 concerns? Below I listed my top three choices from the poll, and do so in bullet form as I give them all roughly an equal weighting:
- European collapse. This points to the first concern of the masses. Again, this would be all on the private side (e.g. US banks holding sovereign debt or insuring that debt).
- Fiscal tightening in 2013. I have mentioned again and again my preference is for more or at least status quo short-term spending. While I think we are closer to a self sustaining recovery, I see no reason to chance it by cutting back fiscally or monetarily.
- Tie: A war in Iran or a China hard landing. For the former, see above. On the latter, there seems to be solid reasons on both sides (hard and soft landings). A hard landing would certainly have a large impact.
Thanks to TheArmoTrader for highlighting the poll and providing some insight.
