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Thread: NEO Economics !

  1. #1
    zOaib's Avatar
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    NEO Economics !

    got this in a forwarded email , very interesting , i think badgerman will enjoy this for sure !

    To: undisclosed-recipients:;
    Subject: [ NEO-ECONOMICS]
    Date: Thu, 01 Sep 2005 23:27:05 -0400

    >Dear friends,
    >
    >This piece is interesting and makes sense, even to a layman like me.
    >
    >Folks read, its an eye opener, well sort of, seeing the glass half
    >filled or half empty.
    >
    >
    >"SAVING IS SIN, SPENDING IS VIRTUE"
    >Written by an Indian Economist

    >
    >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
    >billions. Yet the 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! Otherwise the US economy would go for a
    >six. 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 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 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 is the economy of 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. "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 last few decades. If any
    >any of you need any help with the spending, I am free and available,
    >call me. IQ

  2. #2
    Mesomorphyl's Avatar
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    The US economy is only as strong as the federal reserve says it is. If we did away with the IRS and you got to keep 25-35% more of your check we would stimulate the economy without the help of alan greenspan.

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    zOaib's Avatar
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    Quote Originally Posted by Mesomorphyl
    The US economy is only as strong as the federal reserve says it is. If we did away with the IRS and you got to keep 25-35% more of your check we would stimulate the economy without the help of alan greenspan.
    very true !

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    CAUSASIAN's Avatar
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    Very interesting I always wondered how this worked.

  5. #5
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    everything said is true, but the problem is that this system will eventually collapse, the Jap. and Chinese can only lend money to the US for a few more years, the US debts keep getting bigger and bigger,eventually the US economy starts to collapse and they pull all their money out, the US goes into a downward spiral and eventually breaks apart as the central govt in DC is disbanded.

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    Mesomorphyl's Avatar
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    Quote Originally Posted by eliteforce
    everything said is true, but the problem is that this system will eventually collapse, the Jap. and Chinese can only lend money to the US for a few more years, the US debts keep getting bigger and bigger,eventually the US economy starts to collapse and they pull all their money out, the US goes into a downward spiral and eventually breaks apart as the central govt in DC is disbanded.
    Middle class will be the ones who suffer... The elite establishment will not allow those with power to loose it, so we will have some sort of war or invisible enemy we have to pour our nationalism and civic duty into... When I say we I mean middle and low class. Sad thing, we will believe the next lie as well.

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