Is the US Becoming a Nation of Separatists?

Since the US election, there has been more attention given to a petition about Texas seceding from the United States. This idea is not completely new as the US nation itself was formed by seceding from England. There will also issues of separation during the early years between the northern and southern states. The questions that arise are: Why now? What is the message?

It seems this idea is simply a matter of voter rage that needs to be heard. The number of people signing these petitions is in the hundreds of thousands versus the tens of millions, but is this the beginning of something bigger? These petitions are surfacing in most US states, but the most attention seems to be given to Texas. (1)(2)(3) This rage is not new, but is an accumulation of cynicism over the current state of the economy and government. It is not very significant now, but it may be a symptom of something much bigger which people are trying to resolve.

What does this have to do with your money? When Quebec wanted to separate from Canada, consequences that ensued were corporations exiting Quebec in favour of other places, higher interest rates and a lower Canadian dollar. The province of Quebec has recovered from the effects of that episode – but it is still affecting the area economically. The reasons are simple – money does not like uncertainty. Once trust in an economic region is disturbed, it takes a long time to rebuild. Without a perceived stable political and economic system, money will not stick around. If the individual states want to go down this road, there will be issues economically as well as politically. This does not mean that secession is a bad idea, but all of the factors should be weighed before this option is taken seriously.  Secession would mean a rethinking of how the US governments are operated, both on a national and state level.



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About joetheinvestor
Joe Barbieri has Bachelors degrees in both Civil Engineering and Commerce from the University of Toronto. He has worked in the Financial Services field for over 12 years, covering positions from Retail Customer Service and Fund Accounting, through to Investment Research on the Institutional side. He has worked in 5 companies, spanning banks, a mutual fund, a Consulting Firm and a Large Canadian Pension Plan. He currently has a Chartered Financial Analyst designation (CFA) from the CFA Institute. He has recently published articles in Pension and Benefits Monitor Magazine as well as the Internet.

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