Why do we depend on the US?

View previous topic View next topic Go down

Why do we depend on the US?

Post by Rifdee on 2008-12-29, 22:09

FROM INDIA WITH CAPATI!

The Japanese save a lot. They do not spend much. Also Japan exports far more than it imports. Has an annual trade surplus of over $100 billion, yet Japanese economy is considered weak, even collapsing. Americans spend, save little. Also US import more than it exports. Has an annual trade deficit of over $400 billion. Yet, the American economy is considered strong and trusted to get stronger. But where from do Americans get money to spend? They borrow from Japan , China , and even India. Virtually others save for the US to spend. Global savings are mostly invested in US, in dollars. India itself keeps its foreign currency assets of over $50 billions in US securities. China has sunk over $160 billion in US securities. Japan 's stakes in US securities is in trillions.

Result: The US has taken over $5 trillion from the world. So, as the world saves for the US , Americans spend freely. Today, to keep the US consumption going, that is for the US economy to work, the countries have to remit $180 billion every quarter that is $2 billion a day to the US! Otherwise the US economy would go for a sick. So will the global economy. The result will be no different if US consumers begin consuming less..

A Chinese economist asked a neat question. Who has invested more, US in China , or China in US? The US has invested in China less than half of what China has invested in US. The same is the case with India .. We have invested in US over $50 billion. But the US has invested less than $20 billion in India

Why is the world after US? The secret lies in the American spending, that they hardly save. In fact they use their credit cards to spend their future income.That the US spends is what makes it attractive to
export to the US . So US imports more than what it exports year afteR year

The result: The world is dependent on US consumption for its growth. By its deepening culture of consumption, the US has habituated the world to feed on US consumption. But as the US needs money to finance its consumption, the world provides the money. It's like a shopkeeper providing the money to a customer so that the customer keeps buying from his shop. The customer will not buy; the shop won't have business, unless the shopkeeper funds him. The US is like the lucky customer. And the world is like the helpless shopkeeper financier.

Who is America 's biggest shopkeeper financer? Japan of course. Yet it's Japan which is regarded as weak. Modern economists complain that Japanese do not spend, so they do not Grow. To force the Japanese to spend, the Japanese government exerted itself. Reduced the savings rates, even charged the savers. Even then the Japanese did not spend (habits don't change, even with taxes, do they?). Their traditional postal savings alone is over $1.2 trillions, about three times the Indian GDP. Thus, savings, far from being the strength of Japan, has become its pain. Hence, what is the lesson? A nation cannot grow unless the people spend, not save. Not just spend, but borrow and spend.

Dr. Jagdish Bhagwati, the famous Indian-born economist in the US, told that don't wastefully save. Start spending, on imported cars and, seriously, even on cosmetics! This will put all nations on a growth curve.
'Saving is sin, and spending is virtue..

Before you follow this neo economics, get some fools to save so that you can borrow from them and spend. This is what US has successfully done in the last few decades.


Written by Dr Jagdish Bhagwati an economist - share your thoughts...

Rifdee
Active Member
Active Member

Number of posts : 221
Registration date : 2008-04-26

View user profile

Back to top Go down

Re: Why do we depend on the US?

Post by Wak on 2008-12-30, 13:36

Hard to make a comment on this...been surviving on Monthly Pay Check only...don't bother on this Trade..Trade... Ex-Im ...things...

Next year kalau Contract Wak sambung pun dah kira okeh...maklum la time-time economy sekarang ni yang dah jadi macam roller coaster...


Last edited by Wak on 2008-12-30, 13:49; edited 2 times in total (Reason for editing : Correct wordings)

Wak
Active Member
Active Member

Number of posts : 471
Registration date : 2008-12-17

View user profile

Back to top Go down

Re: Why do we depend on the US?

Post by kutu_beramboi on 2008-12-30, 18:46

kutu doakan semoga kontrak wak akan disambung lagi...

kutu_beramboi
Active Member
Active Member

Number of posts : 597
Location : Qatar
Registration date : 2008-09-10

View user profile

Back to top Go down

Re: Why do we depend on the US?

Post by Wak on 2009-01-12, 07:58

Terima kasih Kutu ...

Wak
Active Member
Active Member

Number of posts : 471
Registration date : 2008-12-17

View user profile

Back to top Go down

Re: Why do we depend on the US?

Post by Sponsored content Today at 19:57


Sponsored content


Back to top Go down

View previous topic View next topic Back to top


 
Permissions in this forum:
You cannot reply to topics in this forum