Work and Rain. Who wants them? We need both of them.
We have to work, not only to earn money to pay our way in the world, but to give a service or product to our fellow-men. Think about it, if we were all idle rich, who would make the stuff we need, grow our food, and give us all the services we expect with our contemporary living style?
Still, if it isn’t I’ll have to make the best of what’s on offer. We can’t change the weather yet – which is probably a good thing, as I’m sure we’d manage to screw that up big time!
Anyway, next time it rains on your day off, just remember you’re lucky to live in a place where there’s usually enough rain, and you’re lucky to have a job that you can have a day off from!
Have a good one!
To the first mother, Mary, he said, ‘You are obsessed with eating. You’ve even named your daughter Candy.’
He turned to the third Mom, Joyce, ‘Your obsession is alcohol. This too shows itself in your child’s name, Brandy.’
At this point, the fourth Mother, Kathy, quietly got up,took her little boy by the hand and whispered, ‘Come on, Dick, this guy has no idea what he’s talking about. Lets pick up Peter and Willy from school and go get dinner.’
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.
The US has taken over $5 trillion from the world. So, as the world saves for the US – Its The Americans who 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 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 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!!!
Tags: american economy, billions, consumption, credit cards, currency assets, economist, foreign currency, global savings, india, japan china, japanese economy, money, neat question, shopkeeper, trade deficit, trade surplus, trillion, trillions