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Interesting article written by an Indian Economist

Tue Oct 11, 2016 5:25 pm by niranjan

An interesting story about world economy. How valid is it? I leave it to you.

Amazing logic indeed. This is a crazy world! 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 billion. Yet Japanese economy is considered weak, even collapsing.

Americans spend, save …

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Isn't there anyone in Sri Lanka who can think Mr Prime Minister ?

Sun Sep 18, 2016 6:15 pm by hettihewa

I read on Sunday times today that rime minister is requesting cabinet to approve USD 2.3 Mn ( Rs 340 Mn) to hire a US based consultancy firm McKinsey and Company to advice Sri Lanka Government how to “set up a Central Programme Management Unit.”

We know that for prime minister anything foreign is gold.

Cant he find anyone in Sri Lanka who can think without spending so much money on a …

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DID MAHINDA CHINTHANAYA GET ITS DUE RECOGNITION ? WAS IT A FAILURE OR FAILED TO COMMUNICATE THE BENEFITS ?

Thu Sep 15, 2016 6:05 pm by niranjan

DID MAHINDA CHINTHANAYA GET ITS DUE RECOGNITION ? WAS IT A FAILURE OR FAILED TO COMMUNICATE THE BENEFITS ?

1. “Build The Sri Lankan knowledge economy” a study carried out On ‘Knowledge for Development’ Strategy, by the Finance and private sector development unit of World Bank in 2007 , identified 4 factors that would drive the economic growth , termed as the four pillars of …

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THE PROPOSED NEW CONSTITUTION TO BENEFIT WHOM ?

Mon Sep 12, 2016 8:12 pm by niranjan

THE PROPOSED NEW CONSTITUTION TO BENEFIT WHOM ?

PROPOSED NEW CONSTITUTION Undoubtedly should be to benefit the people , by the people whom they have elected to act on their behalf , through a so called democratic process but in realty which is limited from the time of the parliament is dissolved and until a new government is elected which is the bitter truth!

Therefor it’s the …

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Village Councils for sustainable economic growth and political stability

Mon Aug 22, 2016 7:08 pm by niranjan

Setting up strong Village Councils could be the way forward to bring sustainable Economic and Political Growth in Sri Lanka which has been talked about but not much attention has been made.


1. There are 14022 Gramasawaka Divisions In the country where a strong administration new work is already in existence, which could be converted into Strong Political and administrative units rather than …

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සිපෙට්කෝටත් අබ සරණයි...

Fri Aug 19, 2016 5:27 pm by NRF

2014 ලාබය රුපියල් මිලියන 1633 යි..
2015 පාඩුව රුපියල් මිලියන 18384 යි..
(2015 මුදල් අමාත්‍යංශ වාර්තාව)

ඔය අතරෙ මේ ටිකත්
සිතා බැලුවොත් හොඳයි...

- 2014 වසරේ බොර තෙල් බැරලයක
මිල …

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හෙජින් ගණුදෙනුව

Wed Aug 10, 2016 9:51 pm by NRF

රාජපක්ෂලාගෙ
හෙජින් ගණුදෙනුවේ
අදට සම්පූරණ අලාභය
රුපියල් කෝටි 1020 යි...
2015 වසරේ පමණක්
ලෝක වෙළඳ පොලේ තෙල් මිල
අඩුවීම නිසා 2014ට සාපේක්ෂව
යහපාලන රජයට ඉතිරි වූ …

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තෙල් මිල අඩුවී ඇති අද, ගුවන් සමාගම් විකිනීම සාධාරණද ?

Thu Jul 28, 2016 9:12 pm by hettihewa

ලෝක වෙළඳ පොලේ ඉන්ධන මිල 50% පහල යාමත් සමඟ 2015 වසරේ මිහින් ලංකා ආයතනය රුපියල් බිලියන 1.3 ක ලාබයක් ලැබීය

ශ්‍රී ලාංකන් ගුවන් සේවයේ වාර්ශික පාඩුව 63% කින් පහලට …

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An Economy in turmoil

Thu Jul 28, 2016 8:53 pm by Hasitha

The inability of the present leadership to manage the country effectively is quite visible. The economy as shown above is in turmoil. Within 1 ½ years the prime minister has announced 3 different policy statements in parliament and public are wondering which one is valid. The budget 2016, which was presented in November 2015, has been the biggest amusement in the Sri Lankan parliamentary …

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Interesting article written by an Indian Economist

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Interesting article written by an Indian Economist

Post by niranjan on Tue Oct 11, 2016 5:25 pm

An interesting story about world economy. How valid is it? I leave it to you.

Amazing logic indeed. This is a crazy world! 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 billion. Yet Japanese economy is considered weak, even collapsing.

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.
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 billion in US securities. 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 for the US - It's 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!

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.

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 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.

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 trillion. 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 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.

'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 !!!

The world is in a economical mess ...

niranjan

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