(no subject)
according to theAtlantic.com, the Peterson Institute for International Economics in Washington, and the harvard business review...
"So why is China shipping its money to America? An economist would describe the oddity by saying that China has by far the highest national savings in the world. This sounds admirable, but when taken to an extreme-as in China-it indicates an economy out of sync with the rest of the world, and one that is deliberately keeping its own people’s living standards lower than they could be. For comparison, India’s savings rate is about 25 percent, which in effect means that India’s people consume 75 percent of what they collectively produce. (Reminder from Ec 101: The savings rate is the net share of national output either exported or saved and invested for consumption in the future. Effectively, it’s what your own people produce but don’t use.) For Korea and Japan, the savings rate is typically from the high 20s to the mid-30s. Recently, America’s has at times been below zero, which means that it consumes, via imports, more than it makes.
China’s savings rate is a staggering 50 percent, which is probably unprecedented in any country in peacetime. This doesn’t mean that the average family is saving half of its earnings-though the personal savings rate in China is also very high. Much of China’s national income is “saved” almost invisibly and kept in the form of foreign assets. Until now, most Chinese have willingly put up with this, because the economy has been growing so fast that even a suppressed level of consumption makes most people richer year by year.
and now to home owners....
here's some fact on american debt:
As of April 2008, the total U.S. federal debt was approximately $9.5 trillion, about $79,000 in average for each American taxpayer. Of this amount, debt held by the public was roughly $5.3 trillion.If, in addition, unfunded Medicaid, Social Security, etc. promises are added, this figure rises to a total of $59.1 trillion. In 2007 the public debt was 36.8 percent of GDP ranking 65th in the world.
$79,000 per american. thats an average, so gathering the population and dividing it equally you get this amount. but realisticly its higher at a smaller percentage. 30% at least, wont qualify for a loan over $20,000. so 60-70% of those who OWN homes have mortgage loans from on average $200,000 - $450,000. thats a lot more than just $79,000 (averaged) per citizen.
so america is in great debt, and by looking at the consumption facts above, have are in the negative in savings, we CONSUME MORE than we make, and need.
so in this early time of mortgage crisis, were in major debt, with out savings. but we dont owe this just to america. theres forgein debt.
according to the harvard business review, china has (and has been) purchased american mortgage loans from american banks. reducing risks (you) and risks of bankruptcy to banks. thats very nice of them you say? well heres how it works (paraphrased).
an american bank, is in trouble. the mortgage crisis is taking banks under, homes are being forclosed, etc etc.
china comes in and offers to buy the loans, eliminating the risk (you) of not being able to pay your mortgage. and quickly accumulating the determined interest, and theyre paying thousands more than the loan is worth to assure a sale from a bank. its an offer our banks cant resist. theyre getting their money back and more.
so what does this mean?
you no longer pay an american bank for your home. technically it isnt your home untill you pay it off, in like 30 years... so youre paying china now. who OWNS your home. which they can forclose at anytime and or simply hike up the interest, making you pay more.
the chinese have such a high savings bc they live so poorly. they keep their yen and such a low value so we (not just the US but the world) can continue
having products made there for dirt cheap. over night they can inflate the market bc they own about 47% of forgein own dept and along with india they magnifacture most of the worlds products. so over night they can make the dollar the peso.
what are our priorities? a pointless war thats costing 11 billion a WEEK? (about $250,000 a minute, which the next topic) or healing america, our people, and forgiving debt owed to us so we may be treated the same way... hopefully..
consumption has cost us a lot and is increasing
moral of the story, consume less, give more. love, and live a good life, (happiness isnt always good, theres a big difference)
cut those credit cards
"So why is China shipping its money to America? An economist would describe the oddity by saying that China has by far the highest national savings in the world. This sounds admirable, but when taken to an extreme-as in China-it indicates an economy out of sync with the rest of the world, and one that is deliberately keeping its own people’s living standards lower than they could be. For comparison, India’s savings rate is about 25 percent, which in effect means that India’s people consume 75 percent of what they collectively produce. (Reminder from Ec 101: The savings rate is the net share of national output either exported or saved and invested for consumption in the future. Effectively, it’s what your own people produce but don’t use.) For Korea and Japan, the savings rate is typically from the high 20s to the mid-30s. Recently, America’s has at times been below zero, which means that it consumes, via imports, more than it makes.
China’s savings rate is a staggering 50 percent, which is probably unprecedented in any country in peacetime. This doesn’t mean that the average family is saving half of its earnings-though the personal savings rate in China is also very high. Much of China’s national income is “saved” almost invisibly and kept in the form of foreign assets. Until now, most Chinese have willingly put up with this, because the economy has been growing so fast that even a suppressed level of consumption makes most people richer year by year.
and now to home owners....
here's some fact on american debt:
As of April 2008, the total U.S. federal debt was approximately $9.5 trillion, about $79,000 in average for each American taxpayer. Of this amount, debt held by the public was roughly $5.3 trillion.If, in addition, unfunded Medicaid, Social Security, etc. promises are added, this figure rises to a total of $59.1 trillion. In 2007 the public debt was 36.8 percent of GDP ranking 65th in the world.
$79,000 per american. thats an average, so gathering the population and dividing it equally you get this amount. but realisticly its higher at a smaller percentage. 30% at least, wont qualify for a loan over $20,000. so 60-70% of those who OWN homes have mortgage loans from on average $200,000 - $450,000. thats a lot more than just $79,000 (averaged) per citizen.
so america is in great debt, and by looking at the consumption facts above, have are in the negative in savings, we CONSUME MORE than we make, and need.
so in this early time of mortgage crisis, were in major debt, with out savings. but we dont owe this just to america. theres forgein debt.
according to the harvard business review, china has (and has been) purchased american mortgage loans from american banks. reducing risks (you) and risks of bankruptcy to banks. thats very nice of them you say? well heres how it works (paraphrased).
an american bank, is in trouble. the mortgage crisis is taking banks under, homes are being forclosed, etc etc.
china comes in and offers to buy the loans, eliminating the risk (you) of not being able to pay your mortgage. and quickly accumulating the determined interest, and theyre paying thousands more than the loan is worth to assure a sale from a bank. its an offer our banks cant resist. theyre getting their money back and more.
so what does this mean?
you no longer pay an american bank for your home. technically it isnt your home untill you pay it off, in like 30 years... so youre paying china now. who OWNS your home. which they can forclose at anytime and or simply hike up the interest, making you pay more.
the chinese have such a high savings bc they live so poorly. they keep their yen and such a low value so we (not just the US but the world) can continue
having products made there for dirt cheap. over night they can inflate the market bc they own about 47% of forgein own dept and along with india they magnifacture most of the worlds products. so over night they can make the dollar the peso.
what are our priorities? a pointless war thats costing 11 billion a WEEK? (about $250,000 a minute, which the next topic) or healing america, our people, and forgiving debt owed to us so we may be treated the same way... hopefully..
consumption has cost us a lot and is increasing
moral of the story, consume less, give more. love, and live a good life, (happiness isnt always good, theres a big difference)
cut those credit cards