Perspectives on the global economic meltdown- (Nov 28 2010)

Prem · Post by **Prem** » 19 Aug 2011 02:40

ramana wrote:Specfically month of August in South India. Vara lakshmi vrat is observed in this month.

And the Wedding season starts in Oct .
This guy mentioned 18k ton gold held by Indian households . Estimates are out there from 20-70k. 30-35k tons provide ~2T~in hard currency reserves.More than the entire GDP of few developed countries. Dead elephant seems worth more than the alive one.

Its a good idea to use this gold hoarding as positive psy-op for India to nullify any unequal equal equal equation.

Airavat · Post by **Airavat** » 19 Aug 2011 06:40

Europe Markets Slammed As Bank Shares Tumble

Europe's heavy losses were spread across all countries and market sectors, though banks faced some of the biggest falls. Shares of Barclays PLC sank 12% in London, Societe Generale fell 12% in Paris and Dexia SA slumped 14% in Brussels. The losses for SocGen and Dexia came even after a ban on short-selling introduced last week. "Banking stocks have been decimated across Europe, with indiscriminate selling even in banks that maintain their exposure to the crisis is slim," said Will Hedden, sales trader at IG Markets. "No sector is surviving this tidal wave of selling, and the fact that financials are first in the firing line will only lend support to the anti-short-selling-ban camp."

In its decision to cut growth forecasts, Morgan Stanley said the U.S. and euro zone are "hovering dangerously close to recession."

abhishek_sharma · Post by **abhishek_sharma** » 19 Aug 2011 07:26

Life After Debt: In this month's market upheavals in the United States and Europe, we are witnessing the end of a seven-decade economic experiment. But does anyone have any clue what comes next?

VikramS · Post by **VikramS** » 19 Aug 2011 09:23

http://video.cnbc.com/gallery/?video=3000040103

Video on Gold demand which Prem referred to.

Airavat · Post by **Airavat** » 20 Aug 2011 07:03

Euro Bond sales

abhishek_sharma · Post by **abhishek_sharma** » 20 Aug 2011 07:49

The Keynes-Hayek Rematch

yogi · Post by **yogi** » 23 Aug 2011 02:07

Goldman Drops on Report Blankfein Hired Lawyer

Could it be that electoral politics and plummeting ratings is finally pushing government to prepare the coffins for Financial Czars?

yogi · Post by **yogi** » 23 Aug 2011 08:30

yogi wrote:Goldman Drops on Report Blankfein Hired Lawyer

Could it be that electoral politics and plummeting ratings is finally pushing government to prepare the coffins for Financial Czars?

Another one to go!

Head of rating agency S&P stepping down

Ambar · Post by **Ambar** » 23 Aug 2011 09:08

yogi wrote:Goldman Drops on Report Blankfein Hired Lawyer

Could it be that electoral politics and plummeting ratings is finally pushing government to prepare the coffins for Financial Czars?

Government goes seeking blood after every crisis. It was Enron,WorldCom,Tyco (one of the most baffling cases if there's ever one!) after dot com crash. This time around it is Goldman Sachs not because they are profitable and were suave enough to come out of the crash relatively unscathed, but because they are the most visible "jewish" looking firm on WallSt. Don't be too surprised to see Blanfein thrown behind bars on lame charges for 25 yrs while the senators,congressmen,SEC czars who should atleast lose their jobs pat their own backs till they get tendinitis!

shyam · Post by **shyam** » 23 Aug 2011 11:57

British government begins stealing its peoples’ bank deposits ahead of the global financial collapse.

Looks like the above site belongs to some fringe group.

Neshant · Post by **Neshant** » 23 Aug 2011 13:03

i don't have much time so I'm just going to post a bunch of links :

read it its interesting :

THINGS THAT MAKE YOU GO Hmmm...

http://www.scribd.com/doc/62765636/Hmmm-August-20-2011

Neshant · Post by **Neshant** » 23 Aug 2011 13:17

guy who lived through the 2002 economic collapse in Argentina as a 22 year old tells of his experience in this audio interview. In almost all these collapses, the common ingredient or cause are banking crooks.

Always be on guard against attempt to expand the banking & financing "industry" in the country. Too much so called financial services and you just know a parasitic industry is growing like a cancer which will inevitably lead to horrible consequences.

----

Fernando Aguirre
Economic Commentator & Author of "Surviving the Economic Collapse"

http://www.contraryinvestorscafe.com/wp ... guirre.mp3

Neshant · Post by **Neshant** » 23 Aug 2011 13:23

People who lived beyond their means now get their debts forgiven. Anyone paying their mortgage & bills on time is punished by having to pay for the irresponsible. How is this not an invitation to everyone to stop paying their mortgage.

Would the owners have shared their profits with others had the price of housing gone up and they sold the home? If no, why do others have to pay when the house goes down in value?

Surprisingly the Europe controlled & rigged IMF chief Lagarde is nowhere in sight to crack the whip. But they sure know how to squeeze African countries by getting them to cut their food subsidies to their citizens when debts are due.

Hey I'd like a free house too, i could use a better one than the one I'm in! (http://www.youtube.com/watch?v=J3YRWhg4YaA)
-----

Ireland to mull mortgage forgiveness

DUBLIN (Reuters) - Ireland (Berlin: IIK.BE - news) is to consider a proposal to write off up to 6 billion euros (5.25 billion pounds) worth of mortgage debt in a bid to boost the economy, the country's housing minister said.

http://uk.finance.yahoo.com/news/Irelan ... 7.html?x=0

Neshant · Post by **Neshant** » 23 Aug 2011 13:32

let this be a lesson unto all rating chiefs

long live the Triple A !!

I predict S&P will upgrade US to AAA very soon.

------------

S&P chief gets the boot for downgrading the US credit rating

http://timesofindia.indiatimes.com/busi ... 704366.cms

Hari Seldon · Post by **Hari Seldon** » 23 Aug 2011 13:33

Neshant saar,

All this talk of economic collapse and all is just talk only. SO far only Iceland defaulted and is bearing the brunt of its brave and genuinely democratic decision.

Is it possible that some uber TFTA economies will also default and rub shoulders with the prospect of economic collapse? Sure its possible. But what is possible isn't necessarily what is likely.

I'd rather wait and see before jumping the gun advising folks on how to survive economic collapse only.

The elan with which the Fed has staved off collapse thus far fills me with much awe of the almighty Fed. I wouldn't count the TFTAs down even, much less out at this stage of the game.

JMTs and all that, of course.

Neshant · Post by **Neshant** » 23 Aug 2011 13:38

its like a game show.

you can either go for a free house... or what's behind curtain number 2.

------------------
Number of Delinquent Mortgages on the Rise Again
http://www.cnbc.com/id/44227763

Neshant · Post by **Neshant** » 23 Aug 2011 13:47

Hari Seldon wrote:I'd rather wait and see before jumping the gun advising folks on how to survive economic collapse only.

If everyone knew when a collapse is scheduled to arrive, it follows there would never be any collapses.

Obviously the time to learn what others have gone through is not when you are caught in the midst of it yourself.

I don't expect things to get as bad as it did in Argentina. At least I hope not.

I find it amazing that in 2008, all things financial including the currency looked like it was headed for collapse. And here we are in even greater debt believing the talking heads telling us that all has been fixed - with hardly anyone knowing wtf is going on behind the scenes. Does any of it strike you as being absurd?

VikramS · Post by **VikramS** » 24 Aug 2011 02:11

Neshant:

While clearly the current system will undergo massive corrections, I do not understand this collapse concept.

At the end of the day human endeavor is to fulfill human needs. Businesses fulfill certain needs. Many of those needs are basic. Turmoil in the financial market does not mean that the entire world is coming to an end.

Sure there will be disruptions and changes in valuation. However the world does not end when that happens. Argentina defaulted on its debt. Yes there were hardships but it is a thriving country today. The Asian tigers, the Russian default etc: all were major events. A European default will be even bigger; it will be more disruptive. Economic growth is likely to be stunted for a few quarters as the world readjusts. Many banks and companies will not survive. However, it is out of those ruins, that new companies and banks will emerge, without the baggage of the past.

TBTB are a lot more prepared to handle those situations compared to 2008. They will print money, buy bonds, support the market or whatever to make sure that wheels of the economy keeps on running, even if the financial markets retrench. The retrenchment will be very painful for many. But it too will pass.

Neshant · Post by **Neshant** » 24 Aug 2011 11:13

^^ Since 2008, all the credibility of the useless middleman economy has gone out the window. Needless to say I'm wary of listening to all such jive talk. It sounds suspicously like the cloud computing marketing buzzword you ran by me as the reason for stocks going up a while back till i pointed out it was bunk.

There has not been a single new productive industry that has emerged since 2000 to provide well paying jobs on a vast scale. That alone keeps me wary of where things are headed. Biden just flew to China to tell them not to panic as creditors and US will pay them back. That's another red flag.

Although i think Warren Buffet is a tool based on his bailout hounding record of 2008, I'd like to post a quote from one of the articles I posted. Remember this is 2003 and things are in a far, far worse shape right now :

Back in November 2003, Warren Buffet penned an artcle for Fortune magazine warning that America’s trade deficit could no longer be ignored. He felt that America’s “net worth” was “being transferred abroad at an alarming rate.” At the time, the accumulated trade deficit had only reached a few trillion dollars, but it has grown over the last seven years by an average of over $600 billion per annum. As Buffet wrote at the time, “our national credit card allows us to charge truly breathtaking amounts.But that card’s credit line is not limitless.” Makes you wonder what he must be thinking now !.

Well just a while back the joker claimed its time to buy - just before the DOW decline in recent weeks ironically. One wonders if this is a case of the greater fool theory. Find a greater fool to buy your bad investments by selling them on the notion that good times are just ahead.

Neshant · Post by **Neshant** » 24 Aug 2011 12:22

the useless middleman economy
------------------

'Black Swan' Author Taleb: Banks Have Hijacked Society
Tuesday, 23 Aug 2011 08:45 AM
By Julie Crawshaw

The Black Swan” author and economist Nassim Taleb says that repeated bailouts have made it possible for banks to hijack society.

"The bad news is not another recession, it's not figuring what got us here and continuing to make the same mistakes," Taleb tells the BBC.

Taleb says there's a tumor in the center of the financial system that has not been removed, one he calls "an agency problem." This happens when people make money they receive bonuses, but when they lose money, taxpayers and future generations pay the price.

"The core of the problem is that asymmetry in payoff socializing losses and privatizing gain and the generator of that inequity is still there, worse than ever."

(Banks) got us here, and they’re reaping the benefits,” says Taleb. “As an industry, they have not suffered” and the Federal Reserve is “doing everything it can to finance these bonuses.”

“I’m outraged. Banks should be something other than machines that generate themselves bonuses. Today, banks are vastly more centralized than they were before the crisis … much more powerful than they were before (and) they have an incredibly sneaky lobby in Washington.”

Singha · Post by **Singha** » 24 Aug 2011 12:40

friend just came from san jose and made downpayment on a sobha flat. says with interest rates on FD near 0% and expected to stay so, with stock market having wild swings, he has little means to grow his money there....so decided to stay invested here. being a US citizen he is apparently unable to get the 9% FD rates we desis get...more like 4% iirc.

says there were lines of beggars and "shady people" near the indian consulate in SFO and he even claims beggers outside santa clara post office and at intersections in bay area.....apparently a new phenomenon in last 5 yrs.

meantime desis and chinis have apparently piled on to pvt schools in bay area ("challenger" is one big name) and are driving their kids super hard to compete with mumbuwana or pashtunistan or whatever the next competition is going to be from. allegedly its only academics in these schools, no means or emphasis on physical sports - long a given in the american school system.

that being said, other than california this desi-chini frenzy is probably not there and things are fine. my ex-managers kid passed from public school in MA, complete bs from mit and is heading to UC for ms...so mostly it works if you are upper-middle class and live in a good town (outside of CA and its distortions)

VikramS · Post by **VikramS** » 24 Aug 2011 13:04

Neshant:

Yes cloud computing is for real. It will change the way we live and do business. The biggest impact will not be on the giants but small businesses whose productivity will improve when they have access to enterprise level applications at costs they can afford.

The impact of IT driven productivity gains are visible to those who are not blinded by their opinions. Even under the severe doldrums in Europe, the service sector is still doing OK in the US; even the French PMI came out strong yesterday. The biggest reason service sector does OK is that productivity gains allow it to remain competitive; and most of those gains come from IT driven process improvements.

In your rant about new industries and jobs, you completely miss the role of productivity as a long term creator of excess capital (which eventually leads to jobs). You need to think a bit about it but then I may be asking for...

Do YOURSELF a favor and make a list of all the IT outsourcing jobs created in India over the past decade. Bloomberg has an article about how mobile app development is also being outsourced to India. Those jobs did not come from nowhere. BTW, mobile apps are ALL about the cloud.

Now add the number of export oriented manufacturing jobs created in China over the past twenty years?

Now where did those jobs come from?

Ponder about the above question for some time.

If a bulk of those jobs had stayed in the US we would be at almost full employment. Even now the unemployment rate among college educated is barely 2% above the peak bubble. There is no shortage of jobs here in the Bay Area.

There is no doubt that there are immense global imbalances bought about by the rise of China as a mercantile power. Readjustments have to take place to fix that imbalance. The readjustment is going to be painful. It may result in severe economic shocks. Do not forget that it was just 15 years ago that the US had a budget surplus.

The one thing I agree with is that the financial industry is a leech and the current banking model needs to be fixed. The rest of your stuff is just rants not grounded in reality.

You need to step into the real world more often instead of just hanging with the gold-bugs. Incidentally the gold-bugs are out there screaming margin hike/manipulation after Gold corrected today; and this is after an incredible 25% run since July 1. Sometimes I wonder which planet these people come from.

===

Here is an example of how the cloud helps. My wife and I need to keep track of some expenses. I have created a shared google spread-sheet and we update it whenever we need to from wherever we are. No longer have to remember to note; things get done faster, with less hassle, and in a lot more reliable manner.

My brother-in-law, an MD wrote a simple web-based application (he is a self-taught programmer) to allow him to update his own medical records from the hospital he visits. Since MDs are independent professionals, they need to keep their own records from the hospitals records. Now he can make those notes right at the patient's bed-side regardless of which hospital he is in. His compliance has improved as is his billing collection since he no longer has to pass on sheets to his biller. Incidentally his billing people are now based in India; there is no physical contact involved.

I can go on...

Singha · Post by **Singha** » 24 Aug 2011 14:03

the PIO head of S&P has resigned. CT says he was punished on gotus orders for AAA->AA downgrade.

meantime:
Rating agency Moody's has cut Japan's long-term sovereign debt rating, citing concerns about the size of the country's deficit and borrowing levels.

The rating was cut to Aa3 from Aa2, though Moody's also said the country's outlook was stable.

Japan, the world's third-largest economy, has the highest public-debt level amongst developed economies.

Abhijeet · Post by **Abhijeet** » 24 Aug 2011 14:12

I don't see any real increase in beggars or obviously poor people on the streets at least in the Peninsula...SF has always had the homeless under a bridge set. There are also areas like East Palo Alto that haven't really gotten better, but they're also not noticeably worse from what I can tell. The Silicon Valley economy has probably held up the best of any micro-economy in the US.

The super-competitive Asians phenomenon is alive and well though, and probably exacerbated by the macro economy.

The mobile Internet is definitely bringing ubiquitous computing much closer, with all its productivity improvements. It's also going to be huge for developing countries once people can access the full Internet on a Rs. 1500 phone, and the mobile carriers in India start charging reasonably for data. That alone is a massive change that's coming this decade, so I don't know the basis for all the posts about no new productive activity being created etc.

ramana · Post by **ramana** » 24 Aug 2011 19:08

Neshat, Taleb might be hedging against banks. His forst job is hedge funds Writing about markets etc is second job.

gakakkad · Post by **gakakkad** » 24 Aug 2011 19:19

If a bulk of those jobs had stayed in the US we would be at almost full employment. Even now the unemployment rate among college educated is barely 2% above the peak bubble. There is no shortage of jobs here in the Bay Area.

Could the companies have the present level of productivity/profitability if the blue collar jobs had not been transferred to China? I mean look at the way some of these companies have grown in recent years... Had the jobs not been shifted the profitability of the companies would have been much smaller from the present levels ... so they would have employed far less people...

VikramS · Post by **VikramS** » 25 Aug 2011 01:16

gakakkad:

You have a very valid point. While the productivity in the US may not have fallen that much, the profitability of companies certainly would have. However, the overall US economy would have been much more sound.

Most of the profits made overseas are due to overseas labor, and very often the money is never repatriated to the US. All the US has the headquarters; for all practical purposes their foreign operations might as well been different companies with little or no US connection but for licensing the design/IP of some products.

There is context of this discussion that being that you do not need earth-shattering new discoveries for economies to continue growing.

The adoption of existing technologies by a much larger base of users itself has a multiplicative effect which is not dependent on new discoveries. For those billions being exposed to newer technologies, the economic effect is the same as the new technology being invented now and not a decade ago; just because people half the way around the world were using it does not alter the economic impact on the new adopters.

Ground breaking new technologies can certainly help; but they are not necessary as they are made out to be.

Prem · Post by **Prem** » 25 Aug 2011 02:39

Singha wrote:meantime desis and chinis have apparently piled on to pvt schools in bay area ("challenger" is one big name) and are driving their kids super hard to compete with mumbuwana or pashtunistan or whatever the next competition is going to be from. allegedly its only academics in these schools, no means or emphasis on physical sports - long a given in the american school system. that being said, other than california this desi-chini frenzy is probably not there and things are fine. my ex-managers kid passed from public school in MA, complete bs from mit and is heading to UC for ms...so mostly it works if you are upper-middle class and live in a good town (outside of CA and its distortions)

One of my Chinni friends claim he stood all night in front of Challenger so he will be among the few firsts to apply for his kid. All this beside the 2 digit Ks they charge as fee for first grade. It has gone so bad that teachers are now writting letters to the 'asian"parents to remind them not to push the kids to the breaking point. No childhood left for these kids in Massaland. Very unlike, when we were happy with Basta and Phatti in 3rd grade.

Prem · Post by **Prem** » 25 Aug 2011 02:44

Abhijeet wrote:I don't see any real increase in beggars or obviously poor people on the streets at least in the Peninsula...SF has always had the homeless under a bridge set. There are also areas like East Palo Alto that haven't really gotten better, but they're also not noticeably worse from what I can tell. The Silicon Valley economy has probably held up the best of any micro-economy in the US.
charging reasonably for data. That alone is a massive change that's coming this decade, so I don't know the basis for all the posts about no new productive activity being created etc.

EPA have grown rich from early 90s days when it was the murder capital of Amreeka. City did not have the money to bury the daily dead ones. Bay area is not Amreeka . Real Amreeka, like India is in small towns spread all over. I have seen the poverty there closely. Decent folks ,stuck in the poverty cycle and dont know how to break it.

VikramS · Post by **VikramS** » 25 Aug 2011 04:38

1st Gen Desis/Chinese have this Challenger fetish which I find hard to understand.

Life if tough; why spoil a 6 year old's life? They literally start training their kid as if they are preparing for the JEE. In massa-land your success depends on a variety of factors, your overall personality being one of the most important, if not the most important factor....

===
Prem:

The problem is manufacturing jobs. A generation or two ago, an American could go to a vocational school, get trained and then get a decent paying job which would give him a comfortable life-style in the manufacturing industry. Those jobs are gone, as are entire industries. When an entire segment of the economy disappears, that circle of poverty you mention is bound to happen.

paramu · Post by **paramu** » 25 Aug 2011 05:27

DE GAULLE predicted the US monetary crisis in 1965

Neshant · Post by **Neshant** » 25 Aug 2011 09:51

once again, I'm low on time but i'll toss this hand grenade into the forum :

---

Germany reiterates 'no' to eurobonds

Finance Minister Wolfgang Schaeuble told German news magazine Der Spiegel in its edition dated Monday that so-called eurobonds are out of the question as long as the currency zone's 17 nations still run their own fiscal policy, and that different interest rates for eurozone nations were needed to provide "incentives and the possibility of sanctions to enforce solid financial policy."

Perhaps there is also a possibility of Wehrmacht tanks rolling through the streets of countries that don't pay Germans back. So much for the European union. Maybe they can work out a more civilized system where the finance minister of countries that don't pay back German debts is forced to lower his trousers on TV and get the cane on his butt cheeks old school style.

shyam · Post by **shyam** » 25 Aug 2011 11:45

This may be OT.

Why do people feel that Challenger school is bad? I think it is the problem with the parents. My son went to Challenger for one year, KG, and I am happy with the changes happened to him during that time. He too likes the school, not even once did he say that he didn't want to go. Many times we threatened him that we wouldn't let him go to school. When we try to pick him up early from school, he says that he wants to stay there during extended hours. He likes the fun activities during that time.

I know many parents who take their children from Challenger to Kumon tuition, language class, soccer class, music class, martial art and other extra curricular activities. Some one was preparing a KG child for spelling bee competition. I think, this kind of things put excess load on the children. What I don't like about the school is that it starts early in the morning and for that the child has to sleep early. This limits his fun time at home. Unfortunately this is so for all schools.

Singha · Post by **Singha** » 25 Aug 2011 12:46

Kumon tuition, language class, soccer class, music class, martial art and other extra curricular activities

er dont massa schools have these already in school time? almost all the decent schools in desh have it inhouse. my son has taekwondo, swimming, dance, music, art & craft each every week. so we are not sending him anywhere else but to a art class & chess tuition in the same apartment building.

he also has access to a kids play area and indoor badminton at home apart from roaming with his chums on a cycle or playing kirket.

thats way more opportunity that I got. for older kids there are cos here who teach aeromodelling and so on.

gakakkad · Post by **gakakkad** » 25 Aug 2011 15:53

Prem wrote:
One of my Chinni friends claim he stood all night in front of Challenger so he will be among the few firsts to apply for his kid. All this beside the 2 digit Ks they charge as fee for first grade. It has gone so bad that teachers are now writting letters to the 'asian"parents to remind them not to push the kids to the breaking point. No childhood left for these kids in Massaland. Very unlike, when we were happy with Basta and Phatti in 3rd grade.

Its better to stand all night to ensure that your kids get in a top school than standing all night to get an iphone or camping for 3 days to meet harry potter actors.
The reason why it is common with desis and lizards is because they faced tough times in their homelands. And had to push themsleves hard to achieve whatever they had...
Its not counter productive unless one does not push them to the brink ...

gakakkad · Post by **gakakkad** » 25 Aug 2011 16:08

Most of the profits made overseas are due to overseas labor, and very often the money is never repatriated to the US. All the US has the headquarters; for all practical purposes their foreign operations might as well been different companies with little or no US connection but for licensing the design/IP of some products.

You forget one thing here , most important reason why a company establishes factories overseas is because they want to access the overseas market... If they don't thing they can compete with the Indian companies without having a factory in India... As far as china is concerned , for practical purposes the market is a big as the US and probably even bigger.. A decade from now Indian markets would approach that of the US size... It is a myth that companies utilize cheap labour and most of the output in the chinese or Indian units is intended for the US market...

My dad recently bought bpl (an Indian company) ultrasound machines for his hospital in India.. The philips and GE healthcare machines had more features... but cost almost twice as the Indian machines... And the additional features were not mission critical so paying the extra buck was unwarranted... Had they built in India than they could avoid the import duties besides get cheap labour...

A videocon 5 star rated 1.5 ton split AC costs 23-24k INR... similar model from general or carrier is more expensive...needless to say that videocon sells more...

I believe that 0% unemployment , 0% poverty is impossible . At least not in the current system... Its not that US technical school grads are all jobless . Only the bottom tier fails to get employed... U kind find jobs for morons...The prosperity US enjoyed in 1990s is never coming back...

VikramS · Post by **VikramS** » 26 Aug 2011 02:39

gakakkad:

I agree with everything you say about multinationals.

The issue in discussion is the role of the emerging economies (and cheap labor) on the US economy. The decline of the US economy is directly correlated to the loss of the manufacturing base over the past two decades. It went from being a country which a budget surplus to one with huge deficits.

By the way 5% unemployment rates is considered the natural 0% unemployment rate. There are always people who do not want to work and always some people looking/changing jobs.

I am sure that some decline of the base was bound to happen. However the pace it with it happened is mind boggling. The West is net big loser in the globalization, losing their manufacturing base, and in the case of China their IP, while making a very small financial upper-class wealthy while economically ruining an entire class of people.

That imbalance will have to resolve some way or the other. One way is for the dollar to decouple with emerging currencies to reflect the current account situation. We are also likely to see protectionism in one form of the other.

I feel that once the transition happens (it might take a decade), the dollar again will emerge as the reserve currency simply because it is likely to offer the relatively most stable political/military/economic back-drop.

Singha · Post by **Singha** » 26 Aug 2011 08:03

wonders never cease-

UK and Switzerland have reached a deal in which Swiss will tax the secret bank a/c of UK citizens and hand over around 5-10 billion pounds annually to HMG without revealing the names !! and UK has the right to ask for upto 500 names per annum.

so the swiss will continue to run the protection racket they have been running profitably for centuries and zurich and geneva continue to enjoy highest std of living in the world based on bank fees on the stolen money from all over the world.

Neshant · Post by **Neshant** » 26 Aug 2011 13:43

how come India has such a sh&tty deal by comparison with these Swiss ?

gakakkad · Post by **gakakkad** » 26 Aug 2011 16:29

The issue in discussion is the role of the emerging economies (and cheap labor) on the US economy. The decline of the US economy is directly correlated to the loss of the manufacturing base over the past two decades. It went from being a country which a budget surplus to one with huge deficits.

By the way 5% unemployment rates is considered the natural 0% unemployment rate. There are always people who do not want to work and always some people looking/changing jobs.

I am sure that some decline of the base was bound to happen. However the pace it with it happened is mind boggling. The West is net big loser in the globalization, losing their manufacturing base, and in the case of China their IP, while making a very small financial upper-class wealthy while economically ruining an entire class of people.

You seem to have high stakes on America.. Why so worried? I believe you are a silicon valley engineer. If US economy does badly you can find a job anywhere . And desh will be always there for you.

Well , world has finite resources... America is eating lot more than its share...When others start to prosper corrections in unkil are inevitable...US is no longer in the position to suppress others from getting their share .

I agree that lot of inequality exists in the US society.. The smart and cunning 1% own most of it. That is how it has always been and will always be. Conditions were similar in England during the industrial revolution , factory owners were rich.. Labourers were filthy poor.A redistribution is unlikely. This is because these are the people in charge of policy. They are not going to let go of their huge "ill gotten" wealth..
Besides attempting redistribution can paralyse growth and innovations. The negative impact can be seen in India with policies like NREGA .

I agree that some populist protectionist policies can be passed. The that will ensure serious trouble. Powerful countries like China have a stake in US. Germany has already shown signs of dissent. Besides there are many sectors in which American companies are not at all competitive.. Consumer electronics for instance . Apart from microprocessors American companies are not indispensable anywhere else. So countries may start trading oil in different currencies.

I agree that the useless middlemen , banking and finance ruined the country...

That globalization "ruined" the west is a specious argument ... many American companies were epitome of inefficiency ...The auto industry is heavily subsidized ..yet look at the crap they make... Hyundai had no trouble capturing the Indian market... They ll sell more in India than their mother land... while GM/FORD are barely able to compete... That is in spite of the fact that GM arrived almost a decade earlier than Hyundai in India...Had it not been for CHINA sales GM would have shut shops by now... so globalization helped GM... had US BEEN PROTECTIONIST in 1992 it would have been in a far worse condition now...

The present American society is not the same society that made it the super power... I am not a racist but by 2040 US will be a white minority . Look at the blacks and hispanics... they are the fastest growing class of people... I am not generalising , but on an average they are not very productive to say the least...Add to that an ageing population with high dependency... Since you are in the bay area you may not have encountered dumb unproductive workers.

And biggest problem of all .... the health care system ... Its more than a bubble... when this bursts their will be a domino effect. To be honest I want this to burst.. I smell huge opportunities for myself when this will happen.. There is money to be made.