03/12/10 Mumbai, India – There was a time…not so very long ago…when Americans held all the top spots. We had the most…the best…the biggest companies. And the richest people.
Those days are gone…
MEXICO CITY (AP) – Mexican telecom tycoon Carlos Slim is the first man from a developing nation to become the world’s richest person – a shift that underlines the loosening of America and Europe’s stranglehold on the top spots in the billionaires’ club.
Slim’s arrival at the top aroused both pride and anger in Mexico, where many see his fantastic wealth in a poverty-afflicted nation as a sign of what ails it.
With a recovery in the value of his cell phone holdings pushing his estimated fortune to $53.5 billion, Slim jumped past Microsoft founder Bill Gates and investor Warren Buffett when Forbes magazine released its 2010 list of the world’s wealthiest Wednesday.
The rise of Slim, the 70-year-old son of an immigrant shopkeeper, is just a part of the emergence of billionaires in developing countries, Forbes reporter Keren Blankfeld said. She noted this year’s top 10 richest also include two billionaires from India and one from Brazil.
Here’s another item in today’s news:
“China becomes world’s biggest internet market,” says a Reuters headline. There are more Internet users in China than in any other country, says the article. And more cars sold. And more concrete poured.
Travel broadens your horizons, they say. More importantly, it humbles you. You realize that there are a lot more people doing a lot more things than you thought.
All over the world, people bus, hump, schlep, toil and strain. Some work hard. Some work not so hard. Some work smart; others don’t.
But over time, fashions and circumstances change. What goes around, comes around. Those that did once ride so high now lie low…
Yes, dear reader, the world turns. And traveling around…you get to see different parts of it…with different stories to tell…
This morning’s news tells us that 60,000 people are rioting in Greece…torching German cars and generally behaving badly.
What’s their beef? They’re running out of money, running out of credit…and running out of time. Modern macro-economic policies have turned against them.
But they’re not alone. The news from the plains tells us that Kansas might have to close half of its public schools…if it doesn’t find a way to close its budget gap.
The news from other states is not very different. Many foreign governments are in the same fix. Ireland has already begun its “austerity” programs. Italy and Spain can’t be far behind.
But what about the US federal government? No austerity at all. Just the opposite. The feds announced the biggest budget deficit ever – $221 billion for the month of February. In other words, per family, the American government spent approximately $2,000 more than it received in tax revenues. Hmmm….if it continues at this rate, it will spend $24,000 more than it receives per family this year. In round numbers, the typical family will pay about $25,000 in taxes…and receive about $50,000 worth of ‘services.’
Is that a great deal…or what?
It’s an absurdity…it’s preposterous…it’s weird and unnatural. And it can’t last.
It is only possible now because of the peculiar circumstances of today’s financial world. Lenders, investors…Chinese creditors…give their dollars to the US government, believing it to be the most credit-worthy borrower in the world. But as the supply of US debt goes up the quality of it declines.
Already, the US is – from a GAAP accounting point of view – bankrupt. Lenders cannot reasonably expect to get their money back. But that doesn’t seem to bother them. US debt still looks like a better bet than, say, Greek debt.
But the world is full of surprises. What a shock it will be when the US finds itself in Greece’s shoes!
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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Why would it be a shock? Most of us has known this was happening for sometime. That is what is so wonderful about capitalism. You get to go to other countries preaching the message of growth and consumption meanwhile filling your pocket is quick money and the after awhile look at each other and ask your self’s what went wrong. And it is always fun to shoot yourself in the foot and blame it on someone else.
like .99 cents is so much lower than $1.00. Pitiful
Well said, 99 Cent Nation, though full off mistakes in writing and grammar.