Mario Goveia wrote:
> The link below is to another article on the US economy by respected financial
> journalist, Robert J. Samuelson,
> that should be educational for Goans in the middle-east with ties to the
> falling US dollar, because it adds some
> FACTS and much needed context and perspective to what is happening:
>
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/25/AR2008032502298.html?hpid=opinionsbox1
Mario,
Anyone who holds US dollars in his savings account, while his expenses are in a
different currency, is effectively imposing a tax on his savings. The US dollar
will have a weaker purchasing power when the saver needs to use his savings.
Those of us who are lucky enough to live in N. America know that our savings
accounts are guaranteed by Govt insurance. This is not the case in other
countries. When a bank fails, you can lose all your savings. Rumours were going
around this morning that a second US bank is on the verge of bankruptcy. In
addition, Citibank will cut its dividend for a second time as it is discovering
more financial problems. There are real problems in US financial institutions
and this is only the beginning of the crises.
How does this effect Goans?
Let me tell you what happened to East African Goans some years ago. Some
migrated to the UK. When they arrived there, they asked their friends which
were the good banks. Some were advised to put their money in a bank called
BCCI. The bank paid .5% more interest than competing banks. When the Goan
opened his account, he was asked what he did prior to migrating. Those who
answered, "I worked for a bank" were asked to collect a job application form on
the way out. Some of the new immigrants did get jobs at the bank. After working
there for ten years, they woke up one morning to find that the bank had failed.
These unlucky people lost:
1) Their entire life's savings
2) The pension benefits from working at the bank for ten years.
I am mentioning the coming financial crises so that people become aware of:
1) the hazards of putting all ones eggs in one basket
2) the hazards of depending on one currency.
3) the hazards of using only one method to store wealth.
Mervyn3.0
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