Just last week a piece of news made a massive splash across the media: Measured by market capitalisation, the ten most valuable companies in the world all hail from the United States. And of the planet’s 100 most highly-valued listed corporations, 54 are US companies, 26 are European and 17 are Asian.

These numbers once again highlight the strength of the United States’ economy. Exactly one year ago, on January 5, 2015, I gave my commentary on the first page of the German Real Estate News the title, “Why I back the dollar.” Every word I wrote twelve months ago applies just as much today as it did then:

“I have used this platform to repeatedly recommend investments in U.S. real estate and, for some time now, I have been investing more than a third of my own money in dollar investments.

• The banking crisis has been much more rigorously dealt with in the USA.
• Unlike Europe and its Euro, the USA doesn’t have the stigma of an artificial currency.
• The USA has demographics on its side and is growing, while Europe shrinks.
• The USA continues to be more innovative: All of the most successful inventions over the last decade have emerged from the USA, not from Germany: iPhone, Amazon, Google, etc. As far as patents are concerned, it’s as if the rest of the world has fallen asleep.”

That was my analysis exactly one year ago. I continue to remain sceptical as far as the Euro is concerned. The single currency’s underlying problems were in no way remedied during the past year. The EU has become a financial transfer union – Greece benefited from billions in assistance last year, more than any country in history has ever received. The Greek “economy,” however, is still like a bottomless pit, or a black hole from which there isn’t the slightest chance of escape. Europe has been debilitated by statism and a welfare-driven ideology – the direct consequences of which have led, for example, to the depressed state of the French economy. Given everything that happened in 2015, my belief that the Euro has become a stricken currency has only been strengthened. Over the last three years, the Euro has lost more than 17% of its value against the dollar.

And Germany? Germany is in rude health. Today. But Germany will weaken with time. Germany’s most valuable company, Bayer, only made it to 66th on the list mentioned above. VW actually suffered the indignity of dropping out of the Top 100.

And was what I wrote about demographics – i.e. that Europe’s population would shrink while the USA’s would grow – also right? In actual fact, I no longer believe that Germany’s population is going to decrease. But the major difference is the type of migration in America and in Germany:

Germany is not being made any stronger by chaotic and ideologically-driven refugee policies, on the contrary, the country will be weaker in the long-term. Yes, Germany needs migrants. But a comparison of immigration policies in the United States and Germany simply adds another plus to the US column and a minus to the German column.

Germany’s open borders and unrestricted “Willkommenskultur” led to net migration of at least 1.1 million people last year. An additional 4,000 people are still arriving every single day, a majority of whom have absolutely no professional qualifications. It remains to be seen whether many of the recent arrivals can ever be integrated into the German workforce.

And in the USA? For roughly ten years now, some 40% of new arrivals to the United States have been Asian. Asian-Americans are uniquely ambitious, as statistics bear out. One study has revealed that 49% of Americans of Asian origin over the age of twenty-five have a bachelor’s degree – the equivalent figure for white Americans is 31%, and for black Americans 18%. The median household income for Asian-Americans is $66,000, $12,000 more than for white households and double the figure for black households. Asian-Americans may only represent 4% of the country’s population, but they account for 25% of the students enrolled at America’s elite universities.

There is a clear difference between an unrestricted “Willkommenskultur,” steeped in ideology, on the one hand, and an immigration policy targeted to attract the world’s brightest and most ambitious migrants, on the other.

Of course, the massive influx of migrants to Germany does have some positive aspects, such as for real estate owners. Over the next few years there will be a huge increase in demand for affordable housing as a result of the current mass migration to Germany. This is yet another plus for German residential real estate.

On a more negative note, a further tightening of tenancy law is widely expected. Just as I had been predicting in the German Real Estate News for years – and I was actually the first to do so – the Mietpreisbremse rental price brake was introduced in 2015. That’s one prediction that I actually wish I hadn’t got right.

And in 2016 I expect that a “Rent Index Manipulation” act will be passed, by which rent indexes will in future be based on rental prices over the preceding ten years. This would represent a nail in the coffin of free market economic principles within the residential real estate sector, and a handover of effective control of rental prices to the state. I still intend to hold on to a majority of my property in Berlin, but 2015 was the first year in which I sold some of my property, investing half of the proceeds in a US real estate fund.

My enthusiastic backing of the dollar has proven itself to be right. From currency gains alone, I achieved a return of ten percent in 2015. And with my participation in a US fund I achieved a return of more than 12% in the first three quarters of the year (not including currency effects!)

For the price of gold denominated in Euros, I predicted nothing more than lateral movement. And that’s exactly what we got. The Euro-transacted gold price remained unchanged over the last twelve months. My recommendations for the coming year include keeping hold of gold as it remains an important hedge against the effects of any dramatic turmoil in the financial system.