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- Germany Votes 319 to 73 in Favour of Eurozone Bailout
Sun, 23 May 2010 19:34:52 GMT
"The alternative was to cut Greece free and issue a warning to the other mis-behaving governments about fiscal prudence, but the European politicians do not want this party to end for it rewards them in many ways and so they will do anything to keep up this pretense. They appear to have forgotten that the aristocracy of France turned a blind eye once and Madam Guillotine provided a swift, if unpalatable solution." ... Click here to read more
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On 49th St. Between 5th and 6th Ave, New York
http://www.healthfreedomusa.org/?p=5428
Saving is sin, and spending is virtue...
Interesting article written by an Indian Economist
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 billions. Yet Japanese economy is considered weak, even collapsing.
Americans spend, save little. Also US imports 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, other countries have to remit $180 billion every quarter, which is $2 billion a day, to the US !
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 the world is 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 US the money.
It's like a shopkeeper providing the money to a customer so that the
customer keeps buying from the shop. If 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 financier? 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?
That is, 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
Manmohan Singh that Indians wastefully save.. Ask them to spend, on imported cars and, seriously, even on cosmetics! This will put India on a growth curve. This is one of the reason for MNC's coming down to India , seeing the consumer spending.
'Saving is sin, and spending is virtue.'
But before you follow this neo economics, get some fools to save so that you can borrow from them and spend!!!
Jagdish Bhagwati on the Global Economy: http://bit.ly/aM4Sop
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