Here is the question I get asked more than any other. What happens if the stock market collapses? My answer is usually grab some jerky, a gun and go find a cave. I say this in jest because the likelihood of that happening is incredibly low. It would mean the United States of America has collapsed. That is unlikely. I pose a different question. What would happen if the stock market doubled in 24 months?
What if China stopped being a pain in the ass Communist country with a little bit of capitalism thrown in and instead, kicked the Communists out and implemented a Capitalist society like the United States? Markets would go crazy over this possible scenario. 1.5 Billion Chinese citizens would benefit. Unleashing those Chinese citizens on the world with their freedom and their money would be a BIG deal.
What if North Korea overthrew their nut job dictator and put in place a capitalist? This is pretty easy to envision, just look at South Korea. The lives of those poor people would improve overnight and the transformation would probably happen quickly, as it did in South Korea after the Korean Conflict. Stock markets would go crazy over this event as we add an entire country to western civilization.
What if Putin died of a heart attack or assassination and Russia stopped fighting the Ukraine and embraced pure capitalism, which has never actually happened in Russia. It would unleash all those people and its many resources toward a better future as they joined the rest of Europe in creating prosperity for its people. Markets would go ballistic over this possible occurrence.
What if Cuba threw out the Communists and replaced them with a democratically elected government ready to embrace capitalism? It would explode with tourism, leading to wealth and a dramatic improvement on the lives of its very poor citizens. Stock markets would go crazy. Their proximity to the U.S. would help Cuba rebound quickly! Most people would see true freedom for the first time.
What if Venezuela kicked their dictator to the curb and took back their country from the Communist leaders that have run it into the ground and turned it into a third world country? They were one of the richest countries in Latin America and now they are one of the poorest. If they elected a capitalist and opened up markets for their oil, it could be rich again. Stock markets would boom!
What if Vietnam and Laos became true capitalistic countries? They are slowly getting there, but the pace is way too pedestrian. What would happen if they elected a true capitalist in those countries? Those people would be provided more freedom and wealth than they ever could have imaged. Stock markets, especially in the emerging markets area, would love this change. The quicker, the better.
What if all of the countries south of the United States changed from being primarily a socialist occupation to embracing capitalism? The people of Brazil, Columbia, Bolivia, Chili, Honduras and Mexico would be freed to create their future instead of allowing the government to decide their fate. These very poor people would be unleashed onto the world scene, causing stock markets to expand dramatically.
What if India and Bangladesh gave up their socialist leanings and constitutions and chose to go all in on capitalism? There are over 1.5 Billion people there. If they were given the opportunity to improve their lives in bigger and better ways, it would truly change the world in some very big ways, which of course, would drastically increase stock markets as the people rose up from abject poverty.
What if Africa got their act together and embraced capitalism with property rights and all that entails? This very large continent could be quite the juggernaught if they ever provided their citizens the freedom to reach for more with governments that are there to help the citizens instead of themselves. An Africa with those types of rights and freedoms would dramatically increase stock markets all over the world.
What if the countries in the Middle East embraced capitalism? Iran, Iraq, Afghanistan and the people in this part of the world would be freed to create a better future for themselves and their families. That is about 200 hundred million people. Opening those countries up to more trade and freedom would dramatically change the lives of those people, giving them hope for a better future. Markets would boom!
What if Artificial Intelligence changed the world in bigger ways than the computer, the internet or the smart phone? Most businesses would benefit in one way or another, making them more efficient, which in turn improves their earnings in a big way. AI is coming and the speed of it will be accelerating over the next few years. Decades from now, we could look back and be astonished at how it changed the world.
What if one or more of those things were to happen? The U.S. economy would benefit dramatically importing and exporting goods and serves. Our stock market would rise dramatically as the world picked up more trading partners who had the wherewithal to buy and sell their way to a better life. Over 4 Billion people would benefit. Poverty would go down. Freedom would go up and stock markets could double!
Could these things happen in our lifetime? Sure, and some will surely take place once the people of those countries have had enough of socialist policies that enrich their governments and cronies at the top and instead share those riches with the millions of people. It is easy to be optimistic on stock market returns when you consider the possibilities of what could be. Embrace what is possible!
