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Saving and Spending.. (Interesting Article)

Discussion in 'Jamii Intelligence' started by Kimbweka, Feb 10, 2011.

  1. Kimbweka

    Kimbweka JF-Expert Member

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    [FONT=Times New Roman,serif][FONT=Book Antiqua,serif]Interesting article written by an Indian Economist[/FONT]
    [FONT=Book Antiqua,serif]
    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.
    [/FONT]
    [FONT=Book Antiqua,serif]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 .[/FONT][FONT=Book Antiqua,serif][/FONT][FONT=Book Antiqua,serif]
    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.
    [/FONT]
    [FONT=Book Antiqua,serif]Result:[/FONT]
    [FONT=Book Antiqua,serif]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 ![/FONT]
    [FONT=Book Antiqua,serif]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.[/FONT]
    [FONT=Book Antiqua,serif]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 .[/FONT]
    ?
    [FONT=Book Antiqua,serif]Why the world is after US?[/FONT]
    [FONT=Book Antiqua,serif]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 [/FONT][FONT=Book Antiqua,serif]. So US imports more than what it exports year after year.[/FONT]
    ?
    [FONT=Book Antiqua,serif]The result:[/FONT]
    [FONT=Book Antiqua,serif]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.[/FONT]
    [FONT=Book Antiqua,serif]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.[/FONT]
    ?
    [FONT=Book Antiqua,serif]Hence, what is the lesson?[/FONT]
    [FONT=Book Antiqua,serif]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.[/FONT]
    ?
    [FONT=Book Antiqua,serif]'Saving is sin, and spending is virtue.'[/FONT][FONT=Book Antiqua,serif][/FONT][FONT=Book Antiqua,serif]
    But before you follow this Neo Economics, get some fools to save so that you can borrow from them and spend !!!
    [/FONT]
    [/FONT]
     
  2. TANMO

    TANMO JF-Expert Member

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    Dah!
    Im speechless...
     
  3. Kimbweka

    Kimbweka JF-Expert Member

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    Its a big deal hahahaha
     
  4. e

    eddy9811 Member

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    very fun .... seems to make sense ~
     
  5. TIMING

    TIMING JF-Expert Member

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    you can only spend more if your purchasing power is high... Tanzania pia ina-import zaidi ya inachoexport na pia ina budget deficit.. but guess what!

    we sit our a$$es and politicize almost every sh!t
     
  6. RealTz77

    RealTz77 JF-Expert Member

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    its very interesting and good trap to the world!
     
  7. Kimbweka

    Kimbweka JF-Expert Member

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    make your choice and u will see
     
  8. Jackbauer

    Jackbauer JF-Expert Member

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    Nimeipenda sana hii.i guess most tanzanians wanaspend, problem hatujapata anaye-save kwa ajili yetu(shopkeeper)
    so we are just customers,not luck ones.
     
  9. P

    Pokola JF-Expert Member

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    sASA MKUU watanzania tutaspend nini?? HAtuna kitu, choka baya bovu!!
     
  10. Kunta Kinte

    Kunta Kinte JF-Expert Member

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    Akili ya mbayuwayu changanya na ya kwako!
     
  11. Kimbweka

    Kimbweka JF-Expert Member

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    Sure, but we have to struggle and be the lucky ones
     
  12. Husninyo

    Husninyo JF-Expert Member

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    Dah! Nimejifunza kitu hapa. Ahsante kimbweka.
     
  13. Juma Contena

    Juma Contena JF-Expert Member

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    Hawa wasomi wa kidosi wanatabia ya kujifanya wao wana uwezo mkubwa kama wakitulia kushinda nchi nyingi. Sasa what propels economic growth if not consumers spending.

    Spending means companies are able to produce and employ along the way allowing the circulation of money (hapo ndipo America inawazidi busara, since you can not print your money recklessly without consequences and other are willing to bring there's in the country; it is the merrier) it allows American home based businesses to invest that money in their economy and create growth. The more people spend it allows other to get hold of that money in turn spread wealth and give people a better quality of life.

    Kwanza India hawana enough people in comparison to america who can afford to spend, halafu anaacha the fact that alot of service sectors world wide ambazo zime base India for cheap labour na ambazo zinapata huge income from service users abroad to propel their economy growth through company taxes, PAYE and giving people a life line..

    What is the percentage of western companies contribution to their national income through taxes and labour. Sasa how can he argue that Amerika spending is bad, angekuwa mchumi aliebobea angejua those countries are not stupid to pour their money in America.

    Because Americas' consumer spending allows them to grow as well: vinginevyo no money to invest in America, means less of americas economic activities, less production, less employment, less spending and at the end affecting all those countries that rely on america's consumer spending. It is for this reason countries pour money to american investors and economy.

    In other words if America doesnt spend all those countries that rely on exporting to America also suffer, as it would mean reducing production, lay people off and loose some of the gov income. So governments have to weigh the balance of lending to america inorder to propell their own economic growth.
     
  14. Inkoskaz

    Inkoskaz JF-Expert Member

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    ..............
    But before you follow this Neo Economics, get some fools to save so that you can borrow from them and spend !!!


    Hapo ndio mtihani.......
     
  15. Gurudumu

    Gurudumu JF-Expert Member

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    This story is actually a hoax
     
  16. Jayfour_King

    Jayfour_King JF-Expert Member

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    You have to predict to when this trend will continue.
     
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