A more volatile international environment usually means an increase in defense spending. This was, for example, the case with both the Reagan and George W. Bush administrations. Since those increases are invariably financed with more debt, their effect on the U.S. economy is stimulative. If higher defense spending promoted higher taxes, then the view from American business leaders would be less sanguine.
Combined with the better-than-expected U.S. growth rate of 3 percent in the third quarter, rising employment, wage growth trending up and commodity inflation, all signs point to a continuation of robust growth in the U.S. economy. Positive sentiment in the world's other major economic regions continues to track in tandem with American optimism and underscores the synchronization of worldwide growth prospects.
Accelerating economic growth worldwide, improving consumer confidence, rising wages and continued strong investment, coupled with a cautious interest-rate policy on the part of the Federal Reserve Bank and other central banks, is laying the foundation for the fastest rate of sustained global growth in more than a decade. Another sustained upswing in equity prices may well push the Dow Jones Industrial Average solidly above 25,000.
— By Joseph Micallef, entrepreneur, international security and military expert and a member of the CNBC-YPO Chief Executive Network
CNBC and YPO have formed an exclusive editorial partnership consisting of regional "Chief Executive Networks" in the Americas, EMEA and Asia-Pacific. These Chief Executive Networks are made up of a sample of YPO's global network of 24,000 top executives from 120 countries who are on the front lines of the economy and run companies that collectively generate $6 trillion in annual revenue.