Bermuda. In this US election year the Bush Government is pushing the economy to recover because recovery will boost President George Bush's uncertain chances of re-election. So far, signs of recovery are very mixed and it may well be autumn before there is any certainty of recovery. By then Bermuda's 1992 tourist season will be ending and another long winter will be setting in.

We think the winter of 1992-1993 will be much more trying for Bermuda than the winter of 1991-1992. There is also no guarantee that the US is really recovering. What we see as hopeful signs may be election year priming of the economy and the overall picture is confused by problems in Japan and unified Germany.

Bermuda is inevitably dominated by events in the United States and the social turmoil in the giant right now has to be disturbing for all of its neighbours.

We think the recession, the aftermath of the profligate Eighties and the sudden understanding that the United States is now a debtor nation with the worst poverty problem of any major country, has resulted in a silent majority revolution, and it is a revolution. A significant number of Americans are tired of their leadership and unhappy with Washington and searching for quick solutions. We think the average American is looking for a magic ballot box solution when the only real solution is a long haul out of debt. In the process, George Bush may pay the price for Ronald Reagan's transgressions. We think that if the revolution continues, and right now it appears to be growing, then it will keep the United States in turmoil for the next four or five years.

It is impossible to tell now what impact these social changes might have on Bermuda but Bermuda never escapes some impact from events in the United States.

We sought for years to end the Cold War yet the end of the Cold War and the emergence of the United States as the single superpower will have enormous consequences for Bermuda in the next two years. We think the United States military in the form we know it today will leave Kindley Field and the base may well be returned to Bermuda with horrific implications for the local economy. We believe that it is unrealistic to think that the United States will continue to operate a base which searches for Russian submarines when there are no longer submarines to track. We cannot believe that the United States will continue to operate this overseas base as a kind of charity to Bermuda when it is closing bases in the United States to the detriment of various areas of the US.

If we are correct, Bermuda will lose jobs supplied by the base. It will lose millions of dollars a year poured into all sectors of the local economy by base personnel. Bermuda will have to find millions to operate the airport just in terms of fire services, air traffic control and weather, never mind maintaining the runways. This Country will also have to come up with a very expensive scheme to make use of the base land area and buildings at a time when it is still considering Daniel's Head and the Naval Annex.

Bermuda will be faced with all this in recessionary times when tourism is weak and slipping and unemployment is an unusual reality.