Yes, we’re back at home, after flying around the world. It was a good trip. No problems. No hassles. Everything went well.
What was the point?
“You know, my friends and relatives in the states still believe that the US is the greatest place in the world,” explained an American in Melbourne, Australia. “They think the rest of the world is full of poor people who can’t wait to emigrate to the US. They need to get out more.”
So we get out. We open our eyes. We look around.
And what do we see?
We see a whole world full of people who are hustling and bustling…schlepping and bussing…each trying to gain an advantage…each looking for a way to get richer, faster.
The motivations all over the world are about the same. People generally want wealth, power and status. And they want to get it in the easiest possible way. But it can mean different things to different people…and they go about it differently too. In the mature economies, they look for subsidies and angles. Tax breaks. Bailouts. Boondoggles. Sinecures.
“We have plenty of corruption here in India, too,” a colleague noted. “But most people know they can’t get much from the government. They have no choice. They have to start a business or get a job.”
Nothing stands still. A few years ago, the Russkies, the Indians and the Chinese were all very helpfully sitting on the sidelines. With their goofy theories and their counterproductive policies, they posed no competition. Americans found it easy to feel superior. Half the world had tied its hands behind its back.
But in the ’70s and ’80s, things began to change. “To get rich is glorious,” said Deng Xiaoping. “Perestroika,” said Gorbachev. And now they’re all at it. Indians, Brazilians, Turks, Indonesians – they all have faster growth rates and much less debt than the developed countries. China and Turkey are both growing about 5 times faster than the US. India, Brazil and a dozen other countries aren’t far behind.
The latest test scores show Chinese math students in Shanghai far ahead of Americans. And the latest reports tell us Chinese trains are setting records – at 300 mph.
Nothing is off limits. No industry is safe. Nobody can expect a free lunch forever.
In India, we rode in a Nano, the car Tata Motors is selling for $2,500. It was a little loud…but surprisingly spacious and comfortable. For getting around town, it seems perfectly adequate. And soon it will be available in the US. How will Detroit compete with these guys on the low end? And on the high end, there’s plenty of competition too – from Japan and Germany.
“But wait…Germany is a mature economy too.”
Well, yes…and no. Germany’s factories and infrastructure were flattened in WWII. It had to rebuild from the bottom up. Its post-war government was completely new. Its currency just came out less than 10 years ago.
Besides that, a large piece of present-day Germany lived under the heel of the Soviets for 45 years. They had a close-hand look at what central planning can do to an economy.
America’s government, meanwhile, has been in business since 1776. Its economy has been the biggest in the world for the last 110 years. It was the only major combatant in WWII to come out the other end with its wartime plant and equipment intact. It has had the world’s richest people and the most gold for many years.
“Nothing fails like success,” is one of our Daily Reckoning dicta. Will it fail now, or later? We don’t know. But readers are urged to get out more…and draw their own conclusions.
Bill Bonnerfor The Daily Reckoning
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.
yeah, ok … correct !
but Europe is best at Saving the Planet !
in Cancun (going to Cancun on holiday is very bad, but going to Cancun to talk about how bad it is to go to Cancun on holiday is good) all the new economies are laughing all the way to some economic and social progress, while the old economies are doing their utmost to prevent just that …
where did we deserve that ?
Parachute journalism has its own perils:
“Though car sales have shot up across India, because of an economy that is growing at nearly 9 percent annually, sales of the Nano have been falling for the last four months. Its maker, Tata Motors, sold only 509 Nanos to its dealers in November — a stark contrast to the 9,000 it delivered in July. Last year, when media coverage and auto writers’ praise were stoking demand, Tata had orders for more than 200,000 Nanos, which has a list price starting at about $2,900. . . .
But the Nano has been troubled almost from its inception. The company’s production plans were thrown off kilter in 2008 when farmers, led by regional politicians, protested that the state of West Bengal had forcibly acquired land at low prices for a factory where the Nano and its parts would be made. Tata had to relocate the factory to another state, Gujarat — causing it to take more than a year and a half to fill orders for the first 100,000 cars.
More recently, the Nano has been hurt by reports of fires in a handful of cars. In one widely publicized instance, a family was taking its new Nano home from a dealership in Mumbai when smoke started billowing from the back of the car. Soon, the entire car was engulfed in flames. There were no injuries — other than to the Nano’s image.”
Pingback: Cheats for Poptropica
One of the most heated political battles raging across the western world is debt versus austerity. In the U.S. this debate reached it's apex in 2011 when the U.S. credit rating was downgraded by Standard and Poor's. In today's essay, however, Chris Mayer throws the debate out the window, explaining why he thinks a U.S. debt crisis will never happen...
Believe it or not, more capital for a company doesn't necessarily mean better returns for investors. In fact, in a recent study that dug through data from more than 200 acquisitions going back to 2006, they found a "sweet spot" for the most likely acquisition targets. And it's lower than you think. Matthew Milner explains...
The Affordable Care Act dumped 2,000 pages of regulations into the health care sector, stifling any innovation that could have brought about real cost savings. But even with these obstacles, there are still people looking for ways to do things better and at a lower cost. These new technologies could be the key to fixing health care in America...
While many of the newer social media stocks struggle for gains this year, old-school tech stocks have become some of the best trades on the market. With the rare exception (Facebook is doing well—shares are up 26% year-to-date) the social stocks are in the gutter. They got off to a fast start in January and Februray, but ran out of steam in the spring. Aside from a few feeble attempts, few have posted anything close to a noteworthy comeback. Twitter, LinkedIn, and Groupon are all down double-digits year-to-date. Groupon—the worst performer on this short list—is down 47%. On the other had, the biggest of the big tech stocks on the market are helping traders pile up even larger gains right now. Greg Guenthner explains…
In the 1960s, total credit in the U.S. broke the one trillion dollar mark...and since then, it has expanded over 50 times. But now, as Richard Duncan explains, the explosion of credit that's made America prosperous, threatens to take the entire economy down. And that could mean the return of another depression...