Lumuhuku

Arbitary Obsessionist's Blog : Ambition is redundant. In life, mission is everything.

Something somewhere went horribly wrong with America

with 2 comments

Stephen Roach, the chairman of Morgan Stanley Asia refers to the Americans as “the most over extended consumers in world history.

 

And he was not wrong.

 

  • The low interest rates in the US, gave Americans the money to keep buying stuffs that they could otherwise have never afforded. (Read LCDs, SUVs, Houses etc.) Now they borrowed against these houses to consume even more. And all the time, they never had any to pay all of it off. Because there was absolutely no rise in income.

They enjoyed their rising wealth without any rise in incomes.

Now that is what you call being stupid!

 

  • Fuel prices in US were too low for too long. Nothing seems wrong in this. Isn’t it? This allowed companies like GMs to continue churning out gas guzzling SUVs with little interest in developing newer and efficient cars. With easy credit available, these idiots kept on buying these cars.

Now that is what you call being blindly stupid!!

 

  • And to top it all, people started making money out of nowhere! Engineers and scientists joined the financial sector and gave devised “Complex & exotic (Read: Toxic)” financial instruments to make money out of money. So what is wrong? These instruments had underlying securities that had almost no value in them at all in the real sense!!

And this had to end somewhere. And what a way it did 😉

Common sense says that finance is best left to those of economics and not scientists and engineers. The latter should be involved in ‘real’ engineering rather than ‘financial’ engineering.

Now that is what you call being stupid in every sense of that word!!!

 

And most of us would recognize the magical cards below…

 

 Credit Cards - The New Weapons of Mass Destruction!!

 

 

Yeah…these are really magical!!!

You can buy anything in the world you want with these. Even if you don’t have the damn ability to pay for it.

These are the real “Weapons of Mass Destruction.

& these have actually killed the American Economy (Most probably for a really long time to come.)

 

Its not just simple economic meltdown that’s happening in America. It is something far more dark and serious.

The entire root system of the American TREE has been uprooted. And mind you, this cannot be put back in soil just like that. It is dead!!

Now Americans need to replant themselves with NEW seeds to economically get back to where they were.

 

They need the seed of saving more.

 

They need the seed of consuming less.

 

They need the seed of investing in themselves rather than the stock markets.

 

Yes. It is really that simple.

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2 Responses

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  1. Very nicely written. You have put it on the table, as it is. I have been in the USA, for 14 years. And i am one of those rare breed, who has spent less, and saved a little for these kind of days.

    It is going to take a long time, to bring back this engine of growth on the rails and running. two, three, four years?… My guess is as good as anyones.

    mahesh

    January 20, 2009 at 8:31 pm

  2. Don’t panic… USA and Canada should join the EU now…

    Jim

    April 24, 2009 at 8:50 am


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