UPDATED 13:00 EDT / FEBRUARY 15 2016

NEWS

John McAfee: The ‘American edge’ in tech investments

The signs of an impending major correction in the tech-stock market are all around us. USA TODAY recently ran an article with the headline ‘Tech-stock wreck destroys $529B this year‘. For some in the tech community, perhaps it seems like the good times will last forever.

Reporter Matt Krantz noted in that article: “Tech stocks can be huge wealth creators when the economy is looking good. But if there are any questions – or even a hint of slowing growth – watch out!”

The situation bears dissection and a root cause analysis. Entire careers are dedicated to this kind of thing, but it’s pretty clear that our economy is a major issue that affects tech disproportionately.

Among the biggest problems in our economy now is the hundreds of billions of dollars that have been printed out of thin air in what some call ‘Quantitative Easing’. Quantitative easing is a term that is normally defined as:

“An unconventional monetary policy in which a central bank purchases government securities or other securities from the market in order to lower interest rates and increase the money supply.”

Unconventional indeed. To the average person, it would seem the only thing that is eased by this blind printing of cash is a one way ticket to disaster. There is also a growing call for negative interest rates. This is a practice that would push the Federal Reserve to spend cash. It is unproven here in this country, and in countries where it has been tried, it has failed to spark economies. I’m all for the Great American Experiment, but this is sheer madness.

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History tells us that these very same scenarios will eventually lead to runaway inflation and major economic problems.

Inflation, debt, and tech burden

Artificially suppressed interest rates, the constant printing of fiat currency and the rising debt in this country can produce no other outcome than massive inflation. There can be no expectation that technology and innovation will be able to stand ground against these combined forces.

Our national debt at this point in time is extremely close to $19 trillion. That is the number 19 followed by twelve zeros. Each American taxpayer now owes more than $158,000 (and growing) to this count. The White House, in collusion with bodies of Congress constituted by both major parties, keeps going back to the till on a yearly basis and putting us deeper in the hole. Eventually that cow is going to run out of milk.

Tech impact

The day will come when financial realities will have to truly be dealt with. High debt carries major risks and high inflation and interest rates wait around the corner, much like a loan shark with a black book and a baseball bat. Private investment will get hit by these economic pressures and that means diminished opportunities for technology to innovate. A lack of investment means nothing will get done. This puts us at a disadvantage against competing nations.

Some politicians have discussed paying down the debt by acting to bring in tax dues from offshore accounts held by major companies. Reports indicate that more than $2 trillion is held by major U.S. firms in other countries. Major technology companies are well represented on the list of companies engaging in this practice. Offshore tax havens are a big problem and they must be dealt with. The bigger problem however, is that business in the United States has somehow become so unattractive at that, sadly, this practice is now standard.

The bottom line is the national fiscal policies that affect the technology business and the country as a whole have become an utter mess. I have lived in a third world country and I can assure you that this coming status is nothing to aspire to. There is no technology to count on in some countries – of any kind. By now, you must sense that the scent of financial disorder here is faint, but distinct, and we should all be alerted to the growing domestic economic disparities that are taking place right now.

Turning things around

There is a way out. The United States is unlike any country in the history of man. There is a common history of greatness and the ability to collectively raise our economic prosperity. I have been at the center of rapid economic activity, back when I started my successful technology company. I want every American to either experience that opportunity for themselves or benefit from them.

To begin, government must break down its own barriers to business. My thoughts on this are simple.

  • Tax matters should be simple, and they should be fair
  • We need better trained people in a number of technologies
  • We need to create better opportunities for them to get that training
  • I will fight for and support the creation of jobs through business, big and small
  • I support technology
  • I support research
  • I support education

The American edge starts with leadership and policies that unleash the potential of what our economy can do. I intend to give us that edge back.

Find out more and support me: www.mcafee2016.com

Image credit: Jesse Wagstaff

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