– the United States, Canada and Mexico – each have a different historical background that influences their culture and governance systems. The U.S. and Canada are of Anglo-Saxon origin, while Mexico has Spanish heritage. The U.S. declared its independence from Britain in the late 18th century, while Canada remained in the British Empire until 1867 and is still a member of the Commonwealth. Once independent, the U.S. expanded to the west and south, partially through land purchases from France and Russia, and partially by the conquest of territory previously held by Mexico and Native Americans.
The three countries are very closely intertwined economically, with the U.S. in the dominant position. The U.S. is the world’s largest economy and strongest military power. North America offers a natural strategic advantage: the continent is shielded by oceans to the east and west. The U.S. effectively projects its power globally by having direct naval access to both the Atlantic and Pacific.
The continent is so rich in natural resources that it is practically self-sufficient. Its big internal markets make its economies less dependent on exports.
The North Atlantic area, comprising Europe and North America, has been the world’s biggest economic zone for the past 200 years. Although this is still the case, the Asia-Pacific region is catching up quickly.
Europe’s self-destruction through two world wars and its increasingly socialist politics in recent decades have given the U.S. the uncontested role of global hegemon. Recently, however, the North American superpower has found itself challenged by China.
The shale revolution in the United States has transformed the domestic oil industry and global oil markets. Tight oil has both increased supplies and shortened the reaction time of production to prices, with the U.S. industry proving more resilient than many expected. New competition has reduced the leverage of other producers like OPEC and shrunk the geopolitical risk factor in oil markets.
German-American relations are at a low ebb. As seen from Washington, Germany is consumed by internal political strife and incapable of acting as a reliable partner in transatlantic policy. So, for the next few years at least, the United States intends to manage bilateral relations on a transactional basis. At the same time, President Donald Trump has reemphasized the historically close U.S.-UK partnership and put more stock on ties with Central Europe.
Like medieval alchemy that failed to turn lead into gold, today’s easy-money folly of central banks and governments will lead to crisis, not economic growth and prosperity. After years of addiction to overspending, neither politicians nor central bankers seem capable of returning to responsible policies. New technologies such as cryptocurrencies, cannot solve the problem but at least expose it by showing alternatives.
At the end of April, the presidents of the United States and China failed to sign a long-overdue trade agreement. Financial markets were not happy. The world of business believes that the crisis is not temporary but that its consequences are far from dramatic and that new opportunities might actually emerge. In this line of thinking, the dip in stock prices is just a healthy correction, after the recent fat gains. There are, however, less rosy scenarios, too.