Tags: Hank Smith | United States | China | economy

Haverford's Hank Smith: Bullish on US Economy

By Dan Weil   |   Wednesday, 06 Nov 2013 08:03 AM

While many commentators see the U.S. economy and corporations in decline, especially after the latest round of dysfunction in Washington, Hank Smith, chief investment officer at money management firm Haverford, begs to differ.

"The United States is the strongest, most diversified, economy in the world, and there is no number two," he told Yahoo.

"China is so far behind the United States it's not even worth talking about."

As of last year, China's GDP was 48 percent smaller than the $15.8 trillion U.S. economy, according to the World Bank.

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But the Organization for Economic Cooperation and Development estimates China will surpass the United States as the world's largest economy in 2016.

Smith believes Treasurys and the dollar will remain the world's benchmarks.

"Whenever there's a problem, money comes to the United States. We saw that in '08 and '09, and we continue to see that," Smith said. In addition, Treasurys rallied after the United States lost its triple-A credit rating in 2011.

"The markets know the U.S. economy is strong," he argued.

"The markets are about corporate America, and corporate America is very strong, in fact, it's never been stronger," Smith said.

But not everyone sees just milk and honey in our economy.

Dallas Federal Reserve President Richard Fisher said Monday that the government's irresponsible fiscal policy has curbed the economic rebound and dulled the impact of the Fed's massive easing program, Reuters reported.

"While the Fed has been moving at the speed of a boomer in full run, the federal government has at best exhibited the adaptive alacrity of a koala (without being anywhere near as cute)," he said.

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