Hi guys, just a thought, any economists on the list, if so your thoughts please :-). An analytical view with numbers would be most welcome regards Anish
On Jan 14, 2008 12:42 AM, Rishab Aiyer Ghosh <[EMAIL PROTECTED]> wrote: > i didn't go through the entire article, but one reason china has a 50% > savings rate - which the article didn't seem to mention - is that > china's state-controlled financial system is screwed up. when you make > money, you can either spend it (like the US does), invest it (like most > places do), or just save it. when you have a messed up financial system > that doesn't allow you to channel surplus to productive investment, as > in china, you save it - eventually in the form of government bonds. the > government then invests it, and as they can't find a good way to do that > back in china they do it in the US. > > so china ends up financing its exports to the US with surplus "savings". > this is like the car dealer who gives you a 100% interest-free loan to > buy more cars. as long as the dealer believes you will eventually pay it > back, it's good for everyone. > > >
