JUDGING A BOOK BY IT’S COVER

Author: SS | 30th Nov 2020 | Read Time: 8-10 mins 

I am part of a business forum in which (as you know) half the time, people stand to impress others by quoting articles written by others, generally foreigners… and thanks to the now so commonly discussed issue of plagiarism, they do acknowledge it’s not written by them. Anyways, I learnt it long back to never get impressed by something written in great English, and more often than not, supported by superficial statistics.

You do know…

There are lies, there are damned lies, and then there’s Statistics!

You also know, that even after 70 years of independence, a large section of the Indian society still lives under the shadow of Britishers and tries to imitate them and treat others who can’t speak proper English as second class citizens! We have been brainwashed to laugh at our culture and traditions (which are by the way the most scientific and logic based–far more superior than any country or culture across the globe) and follow the Western world blindly.

So I am sharing the article as well as my reply to the same which I recently shared on the group.

Purpose is to ask you all not to read something and get impressed just because it’s written in solid English and attitude. At the stage of life you all are in, it’s time you realize and understand that character lies in substance and not in style or form…period. It takes character, knowledge and courage to form and have a perspective of your own. Develop enough skills so you are in a position to formulate a judgement and not get carried away by loosely passed comments by random people. In today’s social media driven frenzied world, leave the task of judging a book by it’s cover to others. We shall operate a level above that!!

Below is the article I’m talking about (quoted as-is from the forum):
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Interesting article written by an Indian Economist about world economy. 🎯 🎯 🎯

Amazing logic indeed. This is a crazy world! How valid is it? I leave it to you!

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 do Americans get money to spend? They borrow from Japan, China and even India.

Virtually others save for the Americans 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. It has 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. Infact, 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 reasons 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 an economical mess 😅
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MY THOUGHTS ON THE SAME:

The shopkeeper (i.e., the world) does look at the strength of the customer before deciding to finance it indiscriminately. Strength of US (customer) is portrayed by strong USD…hence US Treasuries are regarded as the ultimate safe-haven…so much so that even rating agencies wouldn’t dare to downgrade US from Aa1to Aa2 (like Moody’s rating agency downgraded UK from Aa2 to Aa3).

However, if a developing country like India were to become the so called customer and approach the shopkeeper for indiscriminate credit purchases to be funded by the latter, it is but obvious that the shop keeper would not entertain beyond a point and all these rating agencies would be the first to downgrade India to junk grade and we will see the Rupee crumbling like a house of cards.

Note- The comparison to follow is not intended to have any political bias:

It’s like comparing the growth and life style of the Gandhi family with say Namo…they (the Gandhis) had a great time and the poor funded them while Namo struggled for half a century to achieve a certain status…but we know the result…ultimately ‘Kala’ reveals the true picture and rewards austerity, discipline and character.

We are moving towards the same state of the world where there will be a tremendous shift of global power. With an ever-expanding capability in all sectors- including science & technology, military power, foreign relations etc and complimented by a huge young working population- the Indian economy is bound to grow by leaps & bounds. To quote stats, the average age of an Indian is 29 years compared to 37 in China and 47 in Japan. Now you may very well imagine the potential we carry. Change & growth are inevitable. The world order WILL change–may be not immediately, but we can pretty much see it on the horizon. When a pendulum is excessively pulled on one side, it will reverse. It’s just a question of having a clear vision of future decades. India will be the next superpower!

Regards, Sanjay Sir

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