Saving is Sin, Spending is Virtue
Guys, check out who still have money and who's in debt!
Singapore is No. 10, Malaysia is No. 17.. check who is No.163?
INTERESTING ARTICLE on Current Account Balance (please read the article below)Rank Country Current account balance (million US $)
1 People's Republic of China (PRC) 179,100
2 Japan 174,400
3 Germany 134,800
4 Russia 105,300
5 Saudi Arabia 103,800
6 Norway 63,330
7 Switzerland 50,440
8 Netherlands 50,170
9 Kuwait 40,750
10 Singapore 35,580
11 Venezuela 31,820
12 Sweden 28,610
13 United Arab Emirates 26,890
14 Algeria 25,800
15 Hong Kong 20,900
16 Canada 20,560
17 Malaysia 17,860......
...................................
152 Romania -12,450
153 South Africa -12,690
154 Portugal -16,750
155 Greece -21,370
156 Italy -23,730
157 Turkey -25,990
158 India -26,400
159 France -38,000
160 Australia -41,620
161 United Kingdom -57,680
162 Spain -98,600
163 United States -862,300
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 anannual 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 USsecurities. 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 forthe US, Americans spend freely. Today, to keep the US consumption going,that is for the US economy to work, other countries have to remit $180billion every quarter, which is $2 billion a day, to the US !
A Chinese economist asked a neat question. Who has invested more, US inChina , 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 thecustomer keeps buying from the shop. If the customer will not buy, the shopwon'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 importedcars 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!!!
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